NZDUSD Analysis – Bulls Cancel Out the Bearish Drive of the Market
NZDUSD bulls drive the price back into consolidation as the market experiences a false breakout. NZDUSD began ranging after price dropped off the 0.71300 key level. It was a strong bearish drive that bypassed 0.70550 to get 0.69150. The market immediately bounced off the 0.69150 support with a strong move upwards, but bulls hit a stop at the 0.70900 key level. Since then, the market has continued to consolidate.
NZDUSD Key Levels
Resistance Levels: 0.70900, 0.71300
Support Levels: 0.69150, 0.68800
Therefore, NZDUSD has been trading sideways in a confinement between 0.70900 as resistance and 0.69150 as the support level. The bears have always had the upper hand as price ranged through the zone. The market can be seen to be trading more times below the half-line of the ranging zone. The market, therefore, went on a ranging movement for the next 44 trading days before being pushed out of the ranging zone.
Eventually, price broke strongly to the downside of the consolidation zone. The drop surged past the 0.68800 support but the bears weakened at 0.68080. This led to a swift change of direction upwards and back into the consolidation zone. The Parabolic SAR (Stop and Reverse) still reckons the market as bearish. This is likely to continue until the price at least attains the middle line where it was consistently trading previously.
On the 4-hour chart, the market is showing a very strong uptrend. After bouncing off the support at 0.68080, price has ascended past the 0.68800 key level. There was then a pullback to retest 0.68800, which also helped the bulls push back into the consolidation zone. All the signs are currently bullish. The MACD (Moving Average Convergence Divergence) has its EMA line diverging, which has led to strong bullish histogram bars. This shows that price is on a high bullish impulse. This impulse should lift the market to the midline of the consolidation zone at 0.70000, where the market may commence consolidation again.
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