Despite a third straight positive day, the NZDUSD fell short of overcoming significant resistance during yesterday’s session. The level in question extends from the April 2015 high and has capped several advances in recent weeks including the pre-FOMC spike on June 14th.
To be fair buyers did take out last week’s high during yesterday’s session. However, they’ve yet to breach the June high at 0.7318. Moreover, yesterday’s close failed to hold above trend line resistance in the 0.7300 region.
Of course, that doesn’t mean the level will continue to hold. Recent advances against the 0.7300 resistance area could be a warning shot to bears that the current rally is set to extend well beyond current prices.
But we have to go with what’s in front of us and right now that’s a resistance area that continues to reject advancements. So until the 0.7300 area falls on a daily closing basis, I will continue to watch for bearish price action.
There isn’t a clear sell signal at the moment, but the NZDUSD is one I’m keeping an eye on this week. Any bearish price action up here could present a favorable opportunity to get short with an initial target of 0.7200.
I’ll also be watching the intraday charts for signs of weakness, particularly the trend line from the June 21st low.
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