NZDUSD bulls are still on the move despite setbacks earlier this month.
On January 4th I commented on a weekly bullish pin bar. The pair had recovered back above key support at 0.6700 just before the weekend.
The signal pointed to higher prices which is exactly what we got. NZDUSD spent the next week rallying 140 pips.
Then came the second retest of 0.6700 last week.
The bullish engulfing range on the 22nd suggested that bulls were once again ready to regain control.
However, as you can see, NZDUSD buyers have struggled to overcome key resistance at 0.6850 on both occasions. I wrote about this level last Tuesday.
But while this 0.6850 area may continue to attract sellers, a daily close above it would signal the next leg higher.
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I’m not a fan of selling NZDUSD even if today carves a bearish pin bar.
The year-to-date price action illustrates what could be at least a short-term bottom.
In other words, 0.6850 may only trigger a temporary pause in the bullish momentum.
If buyers can clear 0.6850 on a daily closing basis, it will expose the next key resistance at 0.6970.
But as I wrote on January 4th, I wouldn’t be surprised to see this rally reach the 0.7170 area.
Of course, it will take several weeks if not months for that to materialize.
The only thing that would negate the idea is a close below ascending channel support near 0.6700.
Immediate support for the week comes in at 0.6790.