The pair rushed strongly to the upside breaching the resistance for the descending channel which constructed the downside correction over short term basis seen over daily basis above.
NZD USD in Depth
This breach signals that the pair settled for the 38.2% correction for the entire upside wave which started from 0.4885 and ended with the recorded top at 0.7634; therefore, the pair is likely to continue the breached upside wave.
Assessing momentum indicators, we can see that they are moving in overbought areas which might cause some volatility and fluctuation retesting the breached resistance for the descending channel which turned into support at 0.7025 before moving higher over short term basis which we expect will reach the previous recorded top at 0.7634.
Though we should note a couple of technical facts, first is the strong resistance at 0.7325 which might restrict the upside move, and second is returning to trade below 0.7025 which will take the pair into the downside wave again extending the correction targeting 0.6585 and 0.6260.
By: Yasir Mubarak
Senior Technical Analyst
[email protected]
www.ecpulse.com