On October 27th, I wrote about how NZDUSD was likely to continue its rally above 0.6800.
The reason I thought this likely had to do with what’s been occurring on the monthly chart.
Notice the false break that occurred in March.
As always, a false break to one side of a pattern usually triggers an extended move in the opposite direction.
That’s exactly what we’re seeing from the New Zealand dollar.
The pair is holding well above the top of that symmetrical triangle and has recently cleared the 0.6790 region.
I’ll remain bullish as long as NZDUSD stays above 0.6790 on a daily closing basis.
As I mentioned on November 13th, the next key resistance for the pair was 0.6940.
You can see how NZDUSD is encountering selling pressure near 0.6940 this week.
If the New Zealand dollar retraces, you’ll want to keep a very close eye on the 0.6800 area.
A rotation into 0.6800 would be the first retest of the level as new support, and could offer a buying opportunity.
Alternatively, a close above 0.6940 would reduce the odds of a pullback, and open the door to 0.7160.
My longer term target for NZDUSD remains 0.7500.