Welcome to mid-week trading, errbody!
The Kiwi currency strengthened sharply earlier today, enough that NZD/USD is now testing a trend line resistance that hasn’t been broken since late May.But wait, there’s more! As you can see, NZD/USD is also hitting the 100 SMA on the 4-hour time frame.
Kiwi bears who are confident that the last 4-hour bullish candle is a fluke can short at current levels and target the .6940 descending triangle support.
If you’re betting on an upside breakout and then a bullish reversal for NZD, however, then you’ll want to place your orders above the SMAs and then see if there’s enough momentum to hit key areas of interest like .7100 or .7150.
Not only that but there’s also a bullish divergence on the daily time frame!
I don’t know if you’ve noticed, but AUD/USD is flirting with the .7450 inflection point that’s also right smack at the ascending channel support that’s been around since last year.
Can AUD/USD extend its uptrend? Buying at the first signs of bullish momentum would yield a good risk ratio especially if the Aussie pops back up to its 2021 highs and your stops are just below the trend line support.
If you think that the Aussie will stay weak against the dollar, though, then you can also wait for AUD/USD to clearly break the channel support and the 61.8% Fib retracement on the chart before aiming for inflection points like October 2020’s lows.