NZDUSD Looks for a Bullish Breakout, But How Far Could It Go?
NZDUSD refused to return to the low of its downtrend earlier this week, pivoting again near the round 0.6600 level to retest the 20-day simple moving average (SMA) at 0.6640which has been limiting bullish actions for almost a week now.
The upside, however, appears to be more bumpy and the bulls will need to breach a few more barriers before mounting a meaningful rally. The RSI and MACD also reflect some caution among traders. Although they continue to improve, the former is still below its 50 neutral mark and the latter is in the negative zone for the third month in a row.
The 23.6% Fibonacci retracement of the falling leg from 0.7217 to 0.6528 at 0.6690 could immediately cease any upward movement above the 20-day SMA. At breathing distance, the 50-day SMA could also prove a difficult hurdle along the attempt descending trend line at 0.6730, while the 38.2% Fibonacci of 0.6790 may prevent an acceleration towards the previous high of 0.6889 and the resistance trendline currently located around 0.6900.
On the downside, a pullback below the 20-day SMA may initially seek support around 0.6600. If that floor cracks this time, the bears could once again attempt to build the downside structure below the 0.6528 January low and the 0.6500 level with scope to reach the June 2020 limits around 0.6378.
In short, NZDUSD should push for more short-term gains after the rebound above 0.6600. However, it remains to be seen if the upside corrections will be strong enough to boost buyer confidence above 0.6730.