After breaking above a long-term descending trend line, NZD/USD went into correction mode to gather more bullish energy.
Can buyers still sustain the reversal?
Check out these potential support levels on the 4-hour time frame:
NZD/USD: 4-hour
NZD/USD Daily Forex Chart Faster with TradingView
Risk-on flows kicked in for the higher-yielding Kiwi recently, as markets turned cautiously optimistic about the two-week ceasefire and peace talks between the U.S. and Iran.
However, high-stakes negotiations over the weekend failed to bear fruit, triggering another flight to safety and a gap lower for NZD/USD.
Can nearby support levels still hold?
The pair is currently hovering above the 38.2% Fibonacci retracement level and pivot point (.5800) that coincides with a key psychological level.Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S dollar and the New Zealand dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
A larger correction could still test the 50% Fib at .5778 that’s closer to the broken long-term descending trend line that might now hold as a floor. The 61.8% level could be the line in the sand for a pullback, as a break below this could suggest that the downtrend is resuming.
Look out for reversal candlesticks pointing to a bounce off any of the support zones, as this could take NZD/USD back up to the swing high or to the next bullish target at R1 (.5910). On the other hand, long red candles closing below the former trend line could clear the way for a selloff to S1 (.5720).
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Promoted: The Analysis & Strategy are only half the Battle; Your Mindset is the Rest.
Today’s chart art zooms in on NZD/USD’s long-term breakout. But as any pro will tell you, even the cleanest trend-following setup can fall apart if the trader doesn’t stay disciplined when price starts testing the level.
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Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
