Capital Trust
Capital Trust

Dec 20, 2014

02:15 AM EDT

  • New York close
  • London close
  • Tokyo close
  • Sydney close
Market Analysis

Home » Featured » NZD/USD Consolidating but Maintains Bullish Momentum

NZD/USD Consolidating but Maintains Bullish Momentum

Forex Technical Update

Previous: NZD/USD Pulls Back to 0.82 Resistance (11/19)

NZD/USD Daily Chart 7:35PM EST 11/25/2012

NZD/USD 11/25/2012 daily chart

Recent developments: As we begin a new week, let’s take a look at the Kiwi’s recent developments. As seen in the daily chart, NZD/USD has been rally since the May low of 0.7454 until the high in September of 0.8350. This rally broke above the 200-day SMA and more importantly, a declining trendline resistance that extended back to 0.8840 the 2011-high made on August 1 last year.

Consolidation: Since failing to break through the 0.8350 high in September, NZD/USD has retreated, falling to 0.81, reaching down to 0.8050. The sideways price action since late September reflects consolidation, as does the fact that the RSI has since been stuck between 40 and 60. Relative to the rally since the May low of 0.8454, you can see that there has not even been a 38.2% retracement, so its been a relatively mild one.

Bullish bias: In fact, the consolidation has preserved technically bullish bias. 1) Price action tested the 200-day SMA and bounced stayed above. 2) The RSI held above 40, and therefore maintains the previously established bullish momentum. If the daily RSI pushes above 60, it would reflect bullish continuation momentum. If this bias remains, a push above 0.8350 should open up the 2012-high from of 0.8470, set in January this year.

Retracement Target: Currently, the 200-day SMA around 0.8050 should be considered consolidation.  0.7796 is the origin of a trendline since July. That could be a retracement target if the market pushes below 0.8050.

Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.

Share!Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+

, ,

Leave a Reply

Forex, Commodities, Indices

Face Book and Twitter Box

Follow Us

Daily Updates

Daily Updates

Get the latest fundamental analyses, technical analyses and the most up-to-date Forex news catered to your interests, everyday.