NZDUSD has traded sideways in a 365-pip range since December.
Range resistance is 0.6515, with support coming in at 0.6150.
A potential rally from NZDUSD agrees with the US Dollar Index (DXY) breakdown I mentioned in yesterday’s video.
So far, the US dollar is respecting that breakdown, so a pullback this week makes sense.
As for the New Zealand dollar, a 4-hour close above the short-term trend line below could trigger the rally.
My target on a break higher is the channel mid-point at 0.6330.
I wouldn’t use the top of this channel as your primary target, given where US equities and the 10-year yield are trading.
A retest of the 0.6330 mid-point and a substantial pullback is more likely.
But in the meantime, a close above 0.6200 resistance could offer traders a potential 120 to 130 pips of upside.
Alternatively, a daily close below range support at 0.6150 would negate the upside potential and expose support areas such as 0.6000.