Is the NZDUSD set to rally 200+ pips?
Watch the video below to find out what I think.
Be sure to also scroll down for more commentary and an annotated chart.
NZDUSD buyers are refusing to back down this week.
I first wrote about the possible inverse head and shoulders on October 31.
We also looked at the pattern again in Saturday’s forecast video.
More specifically, I pointed out how the potential bullish reversal pattern is still intact despite the recent retest of 0.6320 support.
Notice how NZDUSD bulls are once again testing the neckline at 0.6420/30.
The fact that buyers aren’t backing down is a sign of strength, in my opinion. I wrote about this concept in Monday’s NZDCAD commentary.
Remember too that NZDUSD is coming off a confluence of support around 0.6200.
I wrote about this on October 31.
In fact, the 0.6200 area is the location of a twenty-year trend line that extends from the 2000 and 2001 lows.
As for now, though, it’s going to take a daily close above neckline resistance at 0.6420/30 to expose higher levels.
One such resistance level is 0.6490.
Notice how 0.6490 served as support for the NZDUSD in May and June.
A daily close above 0.6490 would expose the next key resistance area at 0.6580/90.
But the more immediate path forward for NZDUSD depends on whether or not buyers can secure a daily close above 0.6420/30.
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