NZDUSD has been locked in a range since July.
The 280 pip range comes following a false break back in March.
The New Zealand dollar is also holding above a multi-year trend line from the 2014 high.
All of this is bullish for the NZDUSD.
However, one concern some bulls have had recently is the potential of a head and shoulders reversal.
Notice how the price action since July seems to hint at such a pattern.
But I’m not so sure about that.
The New Zealand dollar’s inability to retest 0.6500 support earlier this month suggests strong demand.
Furthermore, the pair is testing the early August high at 0.6710 but doesn’t appear to be faltering.
If NZDUSD pushes past 0.6710 and retests the year-to-date high at 0.6800, it will cancel out any chance of a head and shoulders pattern.
As for me, I like NZDUSD higher toward 0.7500.
It may take months to get there, and we will no doubt see pullbacks along the way, but that’s my target in 2021.
Disclosure: I hold an NZDUSD long position (opened October 27th).
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