Technical Analysis – NZDUSD turns higher but could this be the start of a sizeable rebound?
August 17, 2023 1:28 pm
NZDUSD is trading higher today after testing the support set by the 0.5920 level as the bulls are trying to break the current series of five consecutive red candles. NZDUSD managed to record a new 2023 low, and, despite today’s move, it continues to respect the very aggressive July 14, 2023 downward sloping trendline.
The momentum indicators have clearly taken notice of the downleg since the July 14, 2023 peak. However, apart from the Average Directional Movement Index (ADX) pointing to a strong bearish trend in NZDUSD, both the RSI and the stochastic oscillator could be on the verge of signaling the end of the current sell-off. More specifically, the RSI is edging higher after recording its lower print since the September 2022 sell-off. Similarly, the stochastic oscillator continues to trade at its oversold territory and could be preparing for a decent move higher.
Should the bears decide to ignore today’s move, they would try to finally break the May 15, 2022 low at 0.5920. They could then have a go at both the 23.6% Fibonacci retracement of the April 5, 2022 – October 13, 2022 downtrend at 0.5870 and the October 6, 2022 high at 0.5813.
On the flip side, the bulls are keen on building upon today’s move with first resistance coming at the July 14, 2023 trendline. Higher, the busy 0.6060-0.6092 range, defined by the 38.2% Fibonacci retracement and the July 14, 2022 low respectively, is key from a short-term momentum perspective and it is the final step before pushing NZDUSD back inside the rectangle that has been in place since February 2023.
To conclude, NZDUSD bulls could be smiling today but they need concrete support from the momentum indicators to reverse the current bearish short-term trend.
NZDUSD is trading higher today after testing the support set by the 0.5920 level as the bulls are trying to break the current series of five consecutive red candles. NZDUSD managed to record a new 2023 low, and, despite today’s move, it continues to respect the very aggressive July 14, 2023 downward sloping trendline.
The momentum indicators have clearly taken notice of the downleg since the July 14, 2023 peak. However, apart from the Average Directional Movement Index (ADX) pointing to a strong bearish trend in NZDUSD, both the RSI and the stochastic oscillator could be on the verge of signaling the end of the current sell-off. More specifically, the RSI is edging higher after recording its lower print since the September 2022 sell-off. Similarly, the stochastic oscillator continues to trade at its oversold territory and could be preparing for a decent move higher.
Should the bears decide to ignore today’s move, they would try to finally break the May 15, 2022 low at 0.5920. They could then have a go at both the 23.6% Fibonacci retracement of the April 5, 2022 – October 13, 2022 downtrend at 0.5870 and the October 6, 2022 high at 0.5813.
On the flip side, the bulls are keen on building upon today’s move with first resistance coming at the July 14, 2023 trendline. Higher, the busy 0.6060-0.6092 range, defined by the 38.2% Fibonacci retracement and the July 14, 2022 low respectively, is key from a short-term momentum perspective and it is the final step before pushing NZDUSD back inside the rectangle that has been in place since February 2023.
To conclude, NZDUSD bulls could be smiling today but they need concrete support from the momentum indicators to reverse the current bearish short-term trend.
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