Analyzing the daily chart, a distinct divergence with the MACD becomes apparent, a phenomenon that frequently signals a decline in momentum, typically followed by pullbacks or even reversals. In this instance, we are indeed witnessing a pullback, with sellers strategically utilizing the red 21-day moving average as a potential pivot point for initiating another round of selling pressure.
Should the price manage to surmount the moving average barrier, it's reasonable to anticipate sellers re-entering the market near the 0.5987 resistance level. Such a move would potentially provide sellers with an even more favorable risk-to-reward setup for their trades.
The intricate dynamics at play in NZDUSD make it a compelling pair to watch closely, as traders assess the evolving market conditions and adjust their strategies accordingly.
Examining the 4-hour chart, the price action appears to have been characterized by a degree of choppiness. However, it's noteworthy that the currency pair is navigating within a defined range, featuring significant levels. Importantly, there is an inherent bullish bias, illustrated by the series of higher highs and higher lows, as well as the presence of moving averages that have crossed to the upside.
In the current scenario, the key levels to monitor are the 0.5930 resistance and the 0.5892 support. Should we witness a convincing breakthrough above the 0.5930 resistance, it's plausible to expect a rally that could take the pair toward the 0.5987 resistance.
Conversely, if the price descends below the 0.5892 support level, it could potentially initiate a decline leading to fresh lows. This situation invites traders to stay vigilant and adapt their strategies based on how the price interacts with these critical levels.
Any questions?
Chris
Head Trader & Coach
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