NZD/USD traded higher on Thursday, breaking above the upper bound of the sideways range that had been containing most of the price action since November 25th. In our view, this has changed to short-term outlook to positive for now.
We believe that the bulls could soon challenge the 0.6895 barrier, marked by the high of November 25th, the break of which could trigger extensions towards the high of November 23rd, at 0.6955. If they are not willing to stop there, then we could see them aiming for the inside swing low of November 22nd, at 0.6982, or the high of November 22nd, at 0.7013.
Shifting attention to our short-term oscillators, we see that the RSI lies above 70, but turns down, while the MACD runs above both its zero and trigger lines, but slows down as well. Both indicators detect strong upside speed, which supports the notion for further advances in the near term, but their slowdown suggests that a small setback may be looming before the next positive leg, perhaps after the bulls challenge the 0.6895 level.
Now, in order to start examining the bearish case, we would like to see a clear dip below the lower end of the aforementioned range, at around 0.6735. This could initially aim for the 0.6700 zone, which provided support on December 15th and 20th, where another break could see scope for larger declines, towards the 0.6615 barrier, which is marked as a support by the low of November 4th, at 0.6615.
Disclaimer:
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68.02% of retail investor accounts lose money when trading CFDs with the Company. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.
Copyright 2022 JFD Group Ltd.