Market Analysis – NZDUSD Resists the Plunge From the Bears to Bounce Upwards
NZDUSD resists bear advances to drown the market and has bounced back upwards via the 0.70900 demand level. Sellers had stepped in to cut short the bullish move in the market. Price rally started on the 19th of August 2021 after bulls had employed a morning star candlestick pattern to change the market direction upwards. 0.68080, which is the level the market reversed, was reacting to the downward breakout of price from consolidation.
Significant NZDUSD Levels
Supply Levels: 0.71300, 0.72260, 0.73000
Demand Levels: 0.70900, 0.69150, 0.68080
The price consolidation that occurred between the 0.70900 and the 0.69150 key levels is the lower part of a bigger consolidation which is from 0.73000 to 0.69150. The upper part of the consolidation is from the 0.73000 key level to the 0.71300 key level. The gap between 0.71300 to 0.70900 is like a transition zone to move from the upper part to the lower part of the general consolidation.
NZDUSD fell from the upper half and eased through the transition zone to drop to the lower half on the 16th of June 2021. After about 45 days of ranging, sellers tried to force the market downward, which triggered the buyers to retaliate with a 5.38% price increase, which thrust the market past the lower to the higher consolidation zone. When bulls ran out of steam, sellers tried to plunge the price once more, but price resists the fall with the help of the transition zone.
Market Anticipation
The market can be seen ranging through the transition zone on the 4-hour chart. However, the impulse lies with the buyers as can be seen that they've broken upward once on the 10th of September. The RSI (Relative Strength Index) oscillates around the half-line of the RSI chart. The Stochastic Oscillator has its line plunge into the selling half with several crosses. Bulls must act quickly to lift the market out of the transition zone before sellers retake control.
The market is expected to lift from the transition zone to reach first for 0.72260 before further reactions.
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