I first mentioned the 0.6200 resistance area on NZDUSD on April 7th.
It’s the intersection of a key horizontal level and a previous multi-year trend line from the 2000 lows.
That trend line broke down with the March selloff, as did the 0.6200 horizontal level.
It has taken NZDUSD over two months to climb back to 0.6200 after reaching a low of 0.5468 on March 19th.
Just keep in mind that this may not be the top.
NZDUSD has been a difficult pair to trade of late, primarily due to its reliance on risk assets, which have been propped up by central banks.
The lack of direction from the US dollar isn’t helping matters, either.
And if I look at the monthly chart above, the former trend line support comes in closer to 0.6270 than 0.6200.
But the longer NZDUSD and risk assets as a whole correct higher via a slow grind, the greater the volatility is likely to be on the other side.
The key is getting the timing right.
However, at a minimum ten to one reward to risk ratio, you can be wrong a few times and still come out ahead.
The key for NZDUSD going forward is two-fold.
First, the resistance area between 0.6200 and 0.6270 needs to hold on a monthly closing basis.
Second, sellers need to close the pair back below 0.6150 followed by the short-term trend line from the year-to-date low.
Disclaimer: I hold an NZDUSD short position from 0.6182.