On January 4th I pointed out a bullish signal on NZDUSD.
The weekly bullish pin bar pointed to further gains. It was particularly appealing because of the 0.6700 support handle just below it.
Sure enough, the next week the NZDUSD rallied an additional 120 pips from the low.
However, last week wasn’t so bullish.
The pair erased nearly all of its prior gains and is currently retesting the 0.6700 area.
That means NZDUSD has reached a decision point. If the pair is going to continue its recent bullish behavior, the 0.6700 area must hold as support.
If it doesn’t, channel support from the 2018 low will become the last line of defense.
But I’ll be watching to see how NZDUSD reacts above 0.6700. Bullish price action such as a pin bar could present a favorable buying opportunity.
Key resistance comes in at last week’s high of 0.6850 with a close above that exposing 0.6970.
Keep in mind that New Zealand CPI will be released later today at 4:45 pm EST. The event will no doubt increase volatility for the New Zealand dollar.
As I mentioned on the 4th, the final target for buyers could be as high as 0.7170. The area served as key support in February and March of last year.
Of course, it all depends on whether buyers can hold the line at 0.6700 this week.