NZDUSD In Upside Corrective Phase

NZD price chart
.04 Apr 2024
author avatar image Andreas Thalassinos

Table of Contents

Briefing on NZDUSD

Title: Kiwi In Upside Corrective Phase
Financial instrument: NZDUSD
Timeframe: Daily
Session: Tokyo
Trend: Down
Trend Confirmation: Exponential Moving Average(EMA), Momentum Oscillator, Moving Average Convergence/Divergence(MACD)
Support Levels: 0.59450, 0.59132, 0.58703
Resistance Levels: 0.59879, 0.60197, 0.60626
Trading Strategy: Sell on Rallies, Sell on Breakouts

High Impact Economic Events

Thursday, April 4, 06:30 am (GMT+0), CHF: CPI m/m m/m
Thursday, April 4, 27, 12:30 pm (GMT+0), USD: Unemployment Claims
Friday, April 5, 12:30 pm (GMT+0), CAD: Employment Change
Friday, April 5, 12:30 pm (GMT+0), CAD: Unemployment Rate
Friday, April 5, 12:30 pm (GMT+0), USD: Average Hourly Earnings m/m
Friday, April 5, 12:30 pm (GMT+0), USD: Non-Farm Employment Change
Friday, April 5, 12:30 pm (GMT+0), USD: Unemployment Rate

Trend Analysis for NZDUSD

NZDUSD market analysis showing an established downtrend and a current corrective phase to the upside.

The exchange rate between the New Zealand dollar (NZD) and the United States dollar (USD) has exhibited a significant downward trend since December 28. After reaching a daily peak of 0.63692, a technical reversal to the downside, commonly referred to as a failure swing, was observed. This reversal was characterized by a lower peak of 0.62778 and a trough of 0.61807, which paved the way for a bearish trajectory. During this period, the bears were able to breach the all-time low barrier of 2023 at 0.59851, which was established on May 31st, furthering the decline.

This recent price action suggests a bearish sentiment in the market, with a possible correction to the upside. These developments indicate that further downward momentum may be in store for the Kiwi exchange rate. However, this bearish trend may be subject to correction in the near term.

Indicators and Oscillators Analysis

The Relative Strength Index (RSI) is hovering above the 30-oversold zone, indicating that the pair remains in a downward trajectory. However, traders should exercise caution, as RSI alone may not be a reliable indicator. Additionally, the Bollinger Bands suggest widening volatility as the Upper and Lower Bands diverge in prices. At the same time, the Middle Band serves as immediate resistance to any potential upside correction. The Exponential Moving Average and the Moving Average Convergence/Divergence (MACD) also confirm the downward movement. In particular, prices are trading below the Moving Average line, and MACD is below the baseline. On the other hand, the Stochastic oscillator emerged above the 20-oversold territory, signaling a potential correction to the upside.
Conversely, the MACD oscillator indicates a bullish momentum, with the MACD above the Signal line.

Key Support Levels for Gold

In the current market scenario, the bears hold the reins of the NZDUSD pair, and the exchange rate will likely continue to decline. The initial support level is seen at 0.59450 US dollars, and a further decline may lead to a breach of this level. If that happens, the next support level at 0.59132 could come into play. The violation of this level may indicate further potential for a downturn, and the next significant support level is estimated to be 0.58703. It is crucial to keep a close watch on these support levels to gauge the future direction of the Kiwi.

S1–>0.59450
S2–>0.59132
S3–>0.58703

Key Resistance Levels for NZDUSD

In the event that the bulls take hold of the market, a potential correction to the upside may yield gains in the future. However, resistance is likely to arise at various levels. The initial resistance level is estimated to be approximately 0.59879; subsequently, resistance is projected to be witnessed at 0.60197 and 0.60626, respectively. These levels of resistance could pose a challenge to the market’s upward momentum. Nonetheless, with careful consideration of market trends and strict risk management tools, it is possible to navigate these obstacles and mitigate risks.

R1–> 0.59879
R2–>0.60197
R3–>0.60626

Trading Strategy for Gold

Based on the technical analysis, traders may consider adding to their positions below the recent low of 0.59394, which was marked on April 1.
On the other hand, aggressive traders may explore short-term selling opportunities on rallies towards resistance levels, with tight stop-loss orders to manage risk effectively. Additionally, if the bearish momentum persists and candlesticks close below the Lower Bollinger Band, indicating a continuation of the downtrend, traders may take advantage of the declining prices with short positions.

Conclusion

In conclusion, the technical analysis of the NZDUSD suggests a bearish outlook with the possibility of a short-term correction to the upside, with the Kiwi testing critical levels. Traders should closely monitor price action around key support and resistance zones and relevant technical indicators to identify potential trading opportunities and manage risk effectively in the current market environment.

author avatar image
Andreas Thalassinos

Experienced educator with a demonstrated history of working in the financial services industry. Skilled in Technical Analysis, Market Risk, Asset Management, Stock Market, and Trading Systems. Strong professional with a MSTA by Society of Technical Analysts (UK), CFTe and MFTA focused in Master of Financial Technical Analysis from International Federation of Technical Analysts (USA).