Technical Analysis – NZDUSD bears try to stage a breakout again
June 30, 2023 1:27 pm
NZDUSD is once again testing the lower boundary of the rectangle that has been in place since February 2023. The bears are trying to engineer another breakout, hoping to achieve an aggressive drop towards the 0.5920 area. The overall technical picture is mostly encouraging for their intentions, especially considering the simple moving averages’ (SMAs) convergence that is usually associated with an imminent sizeable move.
From the momentum indicators’ perspective, the Average Directional Movement Index (ADX) has just climbed above its range-trading region, and the RSI is finally hovering below its 50-midpoint. More significantly, the stochastic oscillator is moving lower in an almost vertical fashion and thus signaling a strong bearish tendency.
If the bears are determined to stage a proper breakout, they firstly have to recapture the 0.6060-0.6092 range, populated by the 38.2% Fibonacci retracement and the July 14, 2022 low respectively. They could then make an attempt to finally clear the support set at the May 15, 2022 low at 0.5920. Even lower, the 23.6% Fibonacci retracement at 0.5870 is unlikely to trouble the bears.
On the other hand, the bulls are desperately trying to prevent another breakout. If successful, they can then gradually lead NZDUSD higher, with the 0.6163-0.6191 area being the first test of their decisiveness. Even higher, the 50% Fibonacci retracement at 0.6272, above the recent local peak, appears to be a plausible target for the bulls.
To sum up, NZDUSD bears are preparing for another breakout, but pressure is mounting. If they fail to deliver a strong pullback, they will most likely face the risk of a significant bullish reaction.
NZDUSD is once again testing the lower boundary of the rectangle that has been in place since February 2023. The bears are trying to engineer another breakout, hoping to achieve an aggressive drop towards the 0.5920 area. The overall technical picture is mostly encouraging for their intentions, especially considering the simple moving averages’ (SMAs) convergence that is usually associated with an imminent sizeable move.
From the momentum indicators’ perspective, the Average Directional Movement Index (ADX) has just climbed above its range-trading region, and the RSI is finally hovering below its 50-midpoint. More significantly, the stochastic oscillator is moving lower in an almost vertical fashion and thus signaling a strong bearish tendency.
If the bears are determined to stage a proper breakout, they firstly have to recapture the 0.6060-0.6092 range, populated by the 38.2% Fibonacci retracement and the July 14, 2022 low respectively. They could then make an attempt to finally clear the support set at the May 15, 2022 low at 0.5920. Even lower, the 23.6% Fibonacci retracement at 0.5870 is unlikely to trouble the bears.
On the other hand, the bulls are desperately trying to prevent another breakout. If successful, they can then gradually lead NZDUSD higher, with the 0.6163-0.6191 area being the first test of their decisiveness. Even higher, the 50% Fibonacci retracement at 0.6272, above the recent local peak, appears to be a plausible target for the bulls.
To sum up, NZDUSD bears are preparing for another breakout, but pressure is mounting. If they fail to deliver a strong pullback, they will most likely face the risk of a significant bullish reaction.
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