Market Analysis: Price Anticipates a Bearish Pullback
In late December 2023, NZDUSD experienced a significant Bearish reversal, marking a notable departure from the prevailing bullish trend that had dominated the market. This change in direction occurred after the fall in price breached the critical 0.60000 support level. Despite this downward movement, the bearish momentum began to wane as the pair approached the 0.57900 level, culminating in the formation of a failed low.
NZDUSD Significant Zones
Resistance Levels: 0.62200, 0.63500
Support Levels: 0.60000, 0.57900
This failed low suggested that the selling pressure was losing its grip on the market, leading to a reversal that ultimately resulted in a bullish break in market structure. The bullish sentiment was further affirmed by the daily Moving Average, which indicated a positive bias as the price began to trade above it.
However, the daily Relative Strength Index (RSI) signaled that the currency pair had entered the overbought territory. This overbought condition typically suggests that a potential bearish correction or pullback could be on the horizon. The correction of price is anticipated to decline towards the order block before resuming the bullish trend.
Market Expectation
On the 4-hour chart, there is significant liquidity above the established order block in NZDUSD. This suggests that the currency pair may attempt to capture this liquidity, potentially fueling a bullish move.
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