NZD/USD Bullish above 0.7320, EUR/USD and GBP/USD Surges Higher25 January, 2018 by Aayush Jindal in Market Analysis
- The New Zealand Dollar made good ground recently and traded above 0.7400 against the US Dollar.
- There is a crucial bullish trend line forming with support at 0.7330 on the 4-hours chart of NZD/USD.
- The current price action is positive despite the recent drop from the 0.7437 high.
- New Zealand CPI in Q4 2017 increased 1.6%, less than the forecast of 1.9%.
NZDUSD Technical Analysis
The New Zealand Dollar is enjoying a solid uptrend from the 0.6950 swing low against the US Dollar. The NZD/USD pair has moved up by more than 400 pips so far this month.
Looking at the 4-hours chart of NZD/USD, there is a strong uptrend in place above the 0.7320 pivot level. The pair recently traded above the 0.7400 level and it looks set for further gains.
The pair formed a high at 0.7437 and corrected below the 50% Fib retracement level of the last wave from the 0.7305 low to 0.7437 high. There is a major support forming near 0.7320 and a crucial bullish trend line at 0.7330 on the 4-hours chart.
An intermediate support is around the 76.4% Fib retracement level of the last wave from the 0.7305 low to 0.7437 high. The overall price action is positive as long as the pair is above 0.7320.
If the current trend remains intact, the pair could continue to move higher and it may even test the 0.7400 resistance. The 4-hours RSI retreated from the overbought levels, but it is currently above the 50 level, which is a positive sign.
The market sentiment is very bearish on the US Dollar since other pairs such as EUR/USD and GBP/USD gained a lot of strength recently. EUR/USD was able to move above 1.2350 level and GBP/USD surpassed the 1.4200 level.
Moreover, there was a lot of bearish pressure noted on USD/JPY and the pair broke a major support at 110.00, which is a key negative sign.
To sum up, the greenback is under pressure and pairs like EUR/USD, GBP/USD and NZD/USD may continue to rise.