NZDUSD jumps higher but is capped by 38.2% Fibo

NZDUSD is creating higher highs and higher lows in the short-term, following the rebound off the 16-month low of 0.6524. Currently, the price is failing to surpass the 38.2% Fibonacci retracement level of the down leg from 0.7220 to 0.6524 at 0.6790, with the technical indicators suggesting more bullish actions.

The MACD is strengthening its positive bias above its trigger and zero lines, while the RSI is flattening in the bullish region. In trend indicators, the 20- and 40-day simple moving averages (SMAs) are ready for a positive crossover, signaling greater upside tendency.

If the price climbs beyond the 0.6790 and 0.6810 resistance levels, the next barrier could come from the 50.0% Fibonacci at 0.6870 ahead of the 0.6980 level, taken from the previous highs. Steeper increases could add the optimism for a retest of the 200-day SMA at 0.6930.

On the other hand, a fall below the short-term SMAs and the near-term ascending trend line as well as a daily close beneath the 23.6% Fibonacci of 0.6687 could shift the bias back to bearish testing the 16-month trough of 0.6524 again.To sum up, NZDUSD has been in a positive bias in the short-term view, while in the long-term, the pair is likely to remain negative until there is a push above the 200-day SMA at 0.6930.

About the author

Melina Deltas

Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups. Her technically focused method looks mainly at price action across multiple time frames to capture big moves that develop over the years. She has more than 3 years of experience in analyzing financial markets, specializing in forex, indices, and commodities. Melina studied Pure Mathematics at Lancaster University and has a Master's Degree in Monetary and Financial Economics from the University of Cyprus. Currently, she is an associate member of the Society of Technical Analysts (STA) and a Certified Financial Technician (CFTe).

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