On July 1st, I wrote about a bullish scenario for NZDUSD.
The false break between March and May hinted at a push higher.
NZDUSD was trading at 0.6458 when I wrote that post.
The pair was also coming off of the 0.6380 support are that had attracted buyers since mid-June.
Fast forward to today, and you can see that the New Zealand dollar is trading more than 100 pips higher.
It has also broken above the 0.6550 level I mentioned in Sunday’s video.
If you saw that video, you know that 0.6550 is the location of the trend line that extends from the 2014 high.
Now it’s time to see if NZDUSD bulls can defend the 0.6550 area as new support.
If the pair can stay above that area on a daily closing basis, a move up to 0.6640 and eventually 0.6740 seems likely.
On the other hand, if NZDUSD closes (the day) below 0.6550, it would signal weakness and also re-expose 0.6380.
Keep in mind too that this breakout may require a weekly close as confirmation.
Multi-year levels like this often require confirmation on the weekly and monthly time frames rather than just the daily.
In other words, keep an eye on Friday’s closing price, which is only a few hours away.
A Friday close above 0.6550 will keep buyers in control for next week.
But a weekly close below 0.6550 would suggest that the area is still serving as resistance on a weekly closing basis.
Disclaimer: I hold an NZDUSD long position from 0.6497.
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