NZD/USD: Higher High Confirms Bullish Correction for kiwi
Technical Sentiment: Bullish
Key Takeaways
- The New Zealand Dollar is finally making a comeback, posting strong gains against a basket of currencies;
- Swing configuration shows bullish momentum building with higher low in place and a higher high being targeted;
- NZD/USD bulls eye 0.7970/0.8000, followed by 0.8050/75
NZD/USD is on its way to correct recent losses, with buyers gaining much needed traction following RBNZ’s Financial Stability Report and Gov. Wheeler’s comments on Tuesday evening.
Technical Analysis
The kiwi has officially turned bullish on smaller timeframes, seeing how the technical landscape already offered all the necessary reversal patterns to confirm this view. Spot is currently trading around 0.7865 half-way through the 12th/10 European session. Price is not only stable above a major resistance confluence, marked by previous Lower Highs coupled with 100 and 200 Simple Moving Average on 4H timeframe; it is also not showing any signs of slowing down.
From a swing configuration perspective NZD/USD is officially bullish as traders search for a proper Higher High. The Stochastic Indicator is also exiting oversold territory on the Daily chart, confirming what could potentially become a large bullish correction for the pair.
Towards the upside, NZD/USD buyers will be eyeing two major attraction points. The first one is located between 0.7970 and the large psychological round number of 0.8000, followed by a multi-month price pivot zone at between 0.8050 and 0.8075.
Based on this new direction, the preferred strategy for the coming days is to buy dips and resistance breaks.
