NZDUSD:- Tme for a correction
NZDUSD:- The pair failed to maintain any further bullish price action at the closure of last week. The weekly candlestick closed as a bearish reversal pattern out of the previous resistance zone 0.7350. Price action has reacted from this zone on multiple occasions after spiking higher but rejecting violently on Fridays NFP data release.
After rallying for such a sustained period of time we could now be ready for a form of retracement as the market looks to correct after being potentially overbought.
There is significant downside supports for the pair at 0.7200 and 0.70550 for this pair to look for a confirmed retracement, we would need a daily break and closure below the 0.7300 as this is a key support area for the pair. My particular bias is to see some form of downside momentum as Friday's bearish engulfing candle eclipsed the prior 9 trading days of trading and could be the catalyst for further weakness to follow in February
Previous:- From our previous analysis we can see that 0.7400 has now been hit, in a rapid rise in strength form the NZD without any signs so far of weakness. Having smashed through our monthly key level of 0.7350 we will need to maintain a weekly closure above this level to consider the next upside target. With only a few days to go until the monthly candle closure, it could be an extremely bullish outlook for the pair leading into February. A level to be aware of is 0.7500, as across the board it is a key psychological boundary that the pair may struggle to break beyond. Currently, if we can maintain a daily closure above the highlight key level we may see a retest of the level before going higher. I will maintain a bullish bias for the pair if we can maintain a weekly closure above 0.7350 the pair may still have a further 100-200 pips left in the recent incline.
On Wednesday we have New Zealand Dollar CPI data to be released at 21:45 if we have better than expected results we could expect to see a continued rally higher towards 0.7500