Overview:- By analyzing the daily technical chart we can see that earlier pair was heading south side and was making successively lower lows and lower highs where bears were leading in the game and was playing at front foot. The pair has formed a rounding top pattern and completed successfully on the daily chart. But after arriving at 0.6377 level we have seen counter attack from bull’s side which converted all the bearish sentiments into bullish sentiments.
Well the way bulls are reacting it seems like they are doing their best and heading north side and they may take the pair to 0.6600 level in near term. Overall pair is trading and sustaining in short term downtrend whereas intermediate term trend is still bullish.
In our previous report also we mentioned to go for short around 0.6490-85 level for the target of 0.6430 and 0.6400 with stop loss of 0.6560 level and we are expecting that our readers must have made profit from this move.
Fundamental Analysis:- The central bank kept rates unchanged at 1%, as expected, at 01:00 GMT and surprised markets by rolling out forecasts that showed the borrowing costs will remain unchanged throughout 2020.
The markets were expecting the central bank to hint at deeper rate cuts during the year ahead. As a result, the NZD/USD pair jumped from 0.6408 and 0.6462 in the 15 minutes to 01:15 GMT and is now trading at 0.6465.
The pair could continue to gain altitude on RBNZ ‘s lack of rate cut hint and signs of risk reset in the equity markets. The US stocks rallied on Tuesday with the S&P and Nasdaq printing highest daily closing prices. At press time, major Asian indices like Nikkei and Hang Seng are flashing moderate gains.
Technical Analysis: – Well the current picture dipicts that the recent rebound is from the 61.8% fibonacci retracement level and this is going to be rock as it is known as golden retracement level. A short term downtrend line is still intact on the daily chart and a valid breakout of this line will open the way for the bulls or in outher words the daily closing above 0.6500 level will open the way towards the 0.6600 level in near term. Overall pair is trading and sustaining between all the minor EMA line. Also, pair recently has given us downside breakout of 200 SMA line, which was a strong key support level on daily chart but now that has been convered into a resistance level.
Well it’s an early call we will get further bullish confirmation once we see massive rally continuation as we are already seen bullish storm in the pair and it bounced from 0.6398 to 0.6475 level. This week’s closing matter a lot where if we see a daily closing above 0.6500 then we may expect that it will mark a new high and will break the previous resistance high.
An upside twist in the RSI is also favoring the bulls and A bullish crossover on the MACD indicator is about to come which will be a recent development as both signal line and macd lines are coming near to each other and trying to give bullish crossover which is favoring the price action.
What Next:- The 0.6500 level is immediate key resistance level followed by 0.6600 level where as 0.6400 level can be considered as key support level followed by 0.6350 level. Odds are in favor of bulls and intraday to weekly bias remains bullish on the pair.
Trade idea:- Based on chart and studies above we would suggest our traders and investors that go for long at current levels i.e. 0.6457-55 level for the target of 0.6530 and 0.6600 with stop loss of 0.6380 level.
