NZDUSD Pullback Likely to Be Temporary

Back on October 27th, we looked at a bullish scenario for NZDUSD.

The pair was still consolidating between 0.6500 support and 0.6790 resistance.

However, a combination of factors pointed to a higher New Zealand dollar.

First was the breakout on the monthly time frame.

NZDUSD broke out of this pattern in July.

And although it moved sideways for the next few months, the breakout above was fully intact.

Second, notice the false break in the chart above.

As I often say, a false break to one side of a pattern usually triggers an extended move in the opposite direction.

Because the false break was to the downside, it meant that the New Zealand dollar was likely to move higher.

That’s exactly what we’ve seen over the last few months.

But the momentum has slowed some this week as the NZDUSD pulls back from last week’s high.

Given the bullish momentum since March and the gradual selling pressure of late, I expect this pullback to be temporary.

As I’ve mentioned recently, my longer-term target for NZDUSD is 0.7500.

With that in mind, I’m viewing any pullback into 0.6940 as a buying opportunity.

If 0.6940 fails to hold, I’ll look to 0.6790.

Either way, I’ll be monitoring NZDUSD for any bottoming patterns with Daily Price Action members.

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