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NZDUSD Pullback Likely to Be Temporary

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Back on October 27th, we looked at a bullish scenario for NZDUSD.

The pair was still consolidating between 0.6500 support and 0.6790 resistance.

However, a combination of factors pointed to a higher New Zealand dollar.

First was the breakout on the monthly time frame.

NZDUSD monthly time frame showing breakout
NZDUSD monthly time frame

NZDUSD broke out of this pattern in July.

And although it moved sideways for the next few months, the breakout above was fully intact.

Second, notice the false break in the chart above.

As I often say, a false break to one side of a pattern usually triggers an extended move in the opposite direction.

Because the false break was to the downside, it meant that the New Zealand dollar was likely to move higher.

That’s exactly what we’ve seen over the last few months.

But the momentum has slowed some this week as the NZDUSD pulls back from last week’s high.

Given the bullish momentum since March and the gradual selling pressure of late, I expect this pullback to be temporary.

As I’ve mentioned recently, my longer-term target for NZDUSD is 0.7500.

With that in mind, I’m viewing any pullback into 0.6940 as a buying opportunity.

If 0.6940 fails to hold, I’ll look to 0.6790.

Either way, I’ll be monitoring NZDUSD for any bottoming patterns with Daily Price Action members.

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NZDUSD horizontal levels on the daily chart
NZDUSD daily time frame

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7 comments
Justin Bennett says

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Jamal AL Nassiry says

Hi man ..To which lowest level could the pair go from now ?.Thanks.

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    Justin Bennett says

    It’s all in the post.

    Reply
      Jamal AL Nassiry says

      could you analyse on short term please in addition to your current long term analysis?and also I see that you do not use stop loss,could you take this into account in the future?.thanks.

      Reply
        Justin Bennett says

        I trade using the higher time frames, and I do use stops. I’m not sure what makes you think I don’t.

        Reply
Duncan Muthengi says

Hi Justin, I’ve always tried to reach you but i never get a response. I have an enquiry about joining DPA. Would you kindly get in touch?

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Khaleeq Ur Rehman says

Thank you sir

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