NZD/USD is testing a key resistance zone in the 4-hour time frame!
Will the pattern hold in the next trading sessions?
I don’t know if you’ve been watching non-USD currencies lately but commodity-related currencies like AUD, NZD, and CAD have gotten some support from higher crude oil prices, China’s strong trade data, and an overall anti-USD sentiment.
Meanwhile, the U.S. dollar has been leaking pips against its major counterparts after Powell’s testimony confirmed interest rate cuts this year.
NZD/USD 4-hour Forex Chart by TradingView
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the U.S. and New Zealand dollars, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
If your fundamentals research points you to a possible reversal of NZD/USD’s March upswing, then you can watch how the pair reacts to the .6175 area of interest.
As you can see, NZD/USD’s current consolidation lines up with not only the top of an established range but also the R1 (.6170) Pivot Point line in the 4-hour time frame.
If NZD/USD gets rejected from the resistance zone, then the pair could draw in more currency bears and put a move back to the .6120 mid-range and Pivot Point levels on the table.
But what if NZD/USD bulls aren’t done pushing the pair higher?
If your research suggests an extension of the pro-comdoll, anti-USD sentiment, then you can make trading plans around a possible upside breakout for NZD/USD.
Bullish candlesticks and then consistent trading above the R1 Pivot Point and the .6200 previous highs could open up a move to the R2 (.6240) Pivot Point line if not the .6300 psychological handle.
What do you think? Will NZD/USD stay inside its range? Or is the pair due for a breakout?