NZD/USD traded higher on Tuesday after it hit support near the 0.6262 level. The rebound has taken the rate above its overnight peak, that way confirming a forthcoming higher high on the 4-hour chart. Overall, the rate continues to print higher highs and higher lows above an upside support line drawn from the low of May 15th, and thus, we would consider the short-term outlook to be positive.
If the bulls are willing to stay in the driver’s seat, we would expect them to challenge the 0.6342 barrier soon, which provided resistance on March 11th. The rate could retreat after hitting that zone, but as long as it stays above the aforementioned upside line, we would class such a setback as a corrective move before the next leg higher. The next leg north may push above the 0.6342 level, something that may trigger larger bullish extensions, perhaps towards the peak of March 9th, at around 0.6450.
Looking at our short-term oscillators, we see that the RSI, already above 50, has turned up again, while the MACD lies above both its zero and trigger lines, pointing north as well. Both indicators detect accelerating upside speed, supporting the notion for this exchange rate to continue its current uptrend.
In order to abandon the bullish case and start considering a bearish reversal, we would like to see a dip back below 0.6230, a barrier that acted as a strong resistance between May 26th and 29th. This would drive the rate below the upside support line and may pave the way towards the 0.6158 zone, which provided support on May 26th, and resistance on May 11th and 20th. If that hurdle is not able to stop the slide either, then its break may set the stage for extensions towards the 0.6082 territory, defined as a support by the lows of May 22nd and 25th.
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