NZD/USD has been rejected from the previous resistance area and looks set to test lower inflection points!
How far can the NZD/USD pair go before it continues its weeks-long upward trend?
Let's check the 4-hour time frame:
NZD/USD Forex 4 Hours Chart by TradingView
The NZD/USD pair made its highest and lowest levels since the beginning of May when the pair found support from the 0.5875 interest zone.
Then, weaker than expected US CPI readings pushed the pair to 0.6220 levels yesterday. Unfortunately for the bulls, the Fed also pulled a “hardening hold” event and the US dollar recovered some of its losses.
Remember that directional biases and volatility conditions in market prices are usually driven by fundamentals. If you haven't done your financial homework on the US and New Zealand dollars yet, it's time to check the economic calendar and stay up to date with daily essential news!
NZD/USD is now trading near 0.6165 area near R1 pivot point line (0.6178) and middle channel support in 4-hour time frame.
Do you think the kiwi will see further losses against the US dollar before the bulls intervene? Watch for bullish candles from current levels. There is also a move to the 0.6140 pivot point line and 100 SMA area on the table if NZD/USD gains downside momentum after being rejected at 0.6220.
We may also see a retest of the 0.6100 psychological level if NZD/USD bulls target the bottom of an ascending channel pattern!
But if the US dollar continues to see bullish demand, or if market risk sentiment leans against risk, the NZD/USD pair may extend its downtrend under a channel pattern. The pair may head towards the 200 simple moving average and S1 or S2 pivot point areas before seeing sustained upward pressure.
Good luck and good trading this one!