NZDUSD testing major support level, cautious bull wait
The long extended bullish rally in the NZDUSD pair finally faced extremely level of bearish pressure after the pair hit the major resistance level at 0.74347. From that level, the pair has sharply fallen in the global market and most of the aggressive price action traders made a decent profit by shorting the pair with bearish price action confirmation signal. Prior to the closing of the last trading week, the pair found some fresh bullish momentum after hitting the major support level at 0.69374. Though we had an initial breakout of the key support level the buyers finally managed to take control of the market.
NZDUSD daily chart analysis
Figure: Kiwi dollar testing major support level in the daily chart
From the above figure, you can clearly see the bulls are trying to take control of this market. A daily closing of the price above the critical resistance level at 0.70885 will turn the initial bias of this pair bullish which will eventually lead this pair towards the major resistance level at 0.71738. From this level, the sellers might try to take control of this market so the optimistic bulls are advised to close any long orders at the level. However, a valid close of the price above that resistance level will lead this pair towards the major resistance level at 0.74347. On the downside, we need to break below the major support level at 0.69374 to establish bullish momentum.
NZDUSD weekly chart analysis
Figure: NZDUSD testing major trend line in the weekly chart
In the weekly chart, the overall bias for this pair is still bullish. Currently, the pair is testing the major trend line support level at 0.69147. This level is very crucial for the long-term investors since a valid break of this level will confirm the end of the medium-term bullish rally. On the contrary, if the buyers manage to take control of this market from this level, the first initial bullish target for this pair lies at 0.71457. This level might provide an extreme level of selling pressure since we have plenty of resistive candle above this level. However, if the bulls can take out the high of 7th January 2018, we might see a prolonged bullish rally in this pair.
Fundamentally the U.S dollar has gained decent strength over the past few weeks. But in the absence of clear policy from the FED officials regarding their next rate hike, the dollar is trading mixed against most of its major rivals. So we need to see some significant improvement in the Kiwi economy to establish fresh buying momentum. On the contrary, any sluggish performance from in the kiwi economy might result in a ranging market. Considering the technical and fundamental factors of the market it’s better to look for bullish price action signal near the weekly trend line support level. However, if sellers manage to clear this support level, we will see a sharp drop.