NZD/USD Technicals – Short Term Uptrend Intact Despite Early Week Minor Dip

Weekly Chart


Despite defying the odds and pushing back into the multi-year channel support last week, lingering bearish presence is still felt. The W/W gain of more than 300 pips failed to break Channel Top, not to mention failing to break 0.81 resistance and overcome the swing highs back in July. This failure to push higher resulted in a bearish start for this week, with Channel Bottom opening up as the first bearish target at least where Weekly Chart is concerned. This is reminiscent of the decline seen 2 weeks ago – the end result of price not able to break 0.81 back then. Stochastic readings are in line with a move back towards Channel Bottom with readings crossing Stoch line, forming a peak despite not hitting Overbought region. Generally, a stoch peak formed without first hitting Overbought tended not to provide strong signals, but given that previous Stoch peaks did not hit Overbought similarly, we have precedence for strong bearish trends to emerge nevertheless.

Hourly Chart


Short-term charts show price pushing marginally higher during early Asian hours, but we were unable to overcome last Friday’s High, and currently we are on the verge of breaking the soft support of 0.8025. Should bears breach that level, 0.80 opens up to be the 1st obvious bearish target. Further bearish objectives can be reasonably expected should price break the 0.795 to 0.7985, but price should ideally break 0.79 before current short-term bull trend can be invalidated.

Fundamentally, last week would have been a good week for bears to continue selling due to Chinese’s milk-powder ban and the surprise increase in unemployment rate. However, prices managed to shrug off the 2 incidents and rallied, suggesting that underlying bulls are extremely strong. Without any strong fundamental news coming out this week, technical bears will need to dug in deep in order to negate all the strong bullish sentiment surrounding NZD right now. Hence, the break of 0.79 to alleviate bullish pressure becomes all the more important this week.

More Links:
Gold Technicals – Gaping Higher on Bullish COT Numbers
USD/SGD – 1.26 Broken Despite Stronger GDP Outlook
GBP/USD – Rests on Support Level of 1.55

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu