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NZDUSD buyers have been relentless since the December 2nd breakout.
We were anticipating that break given the potential inverse head and shoulders I’ve discussed several times on this site.
Furthermore, notice how the price action in late November began to pressure the 0.6430/40 resistance area.
The higher lows into that region suggested an imminent move higher.
Buyers didn’t even pause at the 0.6490 level, but they aren’t encountering some selling pressure around 0.6590.
That was the second key resistance level we were eyeing following the early December breakout.
But 0.6590 is more significant than you may realize.
Notice the trend line that extends from the March high in the chart below.
I could even make a strong argument that this trend line started back in April of last year.
That makes 0.6590 a confluence of resistance as it’s the intersection of a key horizontal level and a prominent trend line.
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It also means NZDUSD buyers need to clear this area to extend the rally.
And an intraday spike above 0.6590 won’t cut it.
Buyers need to secure a daily close above the area. Until they do, it will continue to serve as resistance.
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A daily close above 0.6590 would expose 0.6660, which is the measured objective of the inverse head and shoulders here.
I wrote about that objective on the 2nd.
Alternatively, bearish price action at 0.6590 such as a pin bar or engulfing candle could trigger a rotation lower into 0.6490 support.