NZD/USD: Solid Technical Case for Both Buyers and Sellers
We have an interesting technical picture unfolding on the NZD/USD at the moment. From the daily timeframe, it is evident that the currency pair has been underwater for the majority of this year. In fact, year to date, we are lower by -6.6%.
Further Selling?
Favouring bears at this point is the downtrend shaped by a series of lower lows and lower highs since topping at $0.6369 and the fact that this week saw the unit push through bids at ascending support taken from the low of $0.5512. As you can see from the chart, price is testing the underside of the ascending base, as we write.
Bullish Recovery?
Evidence is also building for buyers. The pair is on the verge of finishing the day with a bullish outside reversal candle off a Quasimodo support level from $0.5860. Couple this with a neighbouring potential reversal zone (PRZ) derived from a harmonic bat pattern between $0.5792 and $0.5854, and buyers have a reasonably solid basis to begin considering a bullish scenario.
Conservative Approach?
Nevertheless, many traders will likely adopt a conservative approach in this market. For buyers, commitment may be thin until a close back above the ascending support-turned-potential resistance is seen. Similarly, sellers are likely to be reluctant to pull the trigger until the harmonic bat pattern’s PRZ is cleared.
Further Selling?
Favouring bears at this point is the downtrend shaped by a series of lower lows and lower highs since topping at $0.6369 and the fact that this week saw the unit push through bids at ascending support taken from the low of $0.5512. As you can see from the chart, price is testing the underside of the ascending base, as we write.
Bullish Recovery?
Evidence is also building for buyers. The pair is on the verge of finishing the day with a bullish outside reversal candle off a Quasimodo support level from $0.5860. Couple this with a neighbouring potential reversal zone (PRZ) derived from a harmonic bat pattern between $0.5792 and $0.5854, and buyers have a reasonably solid basis to begin considering a bullish scenario.
Conservative Approach?
Nevertheless, many traders will likely adopt a conservative approach in this market. For buyers, commitment may be thin until a close back above the ascending support-turned-potential resistance is seen. Similarly, sellers are likely to be reluctant to pull the trigger until the harmonic bat pattern’s PRZ is cleared.