Market Analysis: NZDUSD Breaks Bullish Trend Line as Bearish Reversal Pattern Emerges
The NZDUSD pair recently experienced a notable bullish rally, starting from the 0.58480 level, which pushed the price upwards and broke the significant 0.62470 resistance. As the bullish momentum continued, the pair targeted the 0.63840 level. However, upon reaching this zone, a significant bearish pullback occurred, characterized by large bearish candles that signaled an aggressive sell-off and a possible shift in market sentiment.
NZDUSD Significant Zones
Resistance Levels: 0.62470, 0.63840
Support Levels: 0.60400, 0.58480
The bearish pullback not only broke the previously established bullish trendline but also hinted at a potential trend reversal. This outlook was further confirmed by the daily Relative Strength Index (RSI), which showed declining momentum from the overbought region, reinforcing the likelihood of a bearish reversal.
A closer look at the 4-hour timeframe adds more clarity. The break of the bullish trendline is more evident, and the price action shows continued bearish pressure, with no clear signs of the downtrend easing. However, the 4-hour RSI has entered the oversold region, indicating a potential short-term bullish retracement.
Given that the overall bias on the higher timeframe leans toward a bearish trend, any bullish momentum on the 4-hour chart should be seen as part of a corrective move rather than a trend reversal. The expected bullish movement is likely to serve as a temporary retracement toward the 4-hour bearish order block before resuming the primary bearish trend.
Market Expectation
As price action continues to develop, the bearish bias becomes more apparent, suggesting a likely move toward the 0.60400 demand level. Whether the price holds or breaks below this level will be crucial in determining the future direction of the NZDUSD pair. A break below this support would indicate further downside potential, while a strong bounce could signal either a consolidation phase or a potential trend reversal. Traders monitoring this scenario might also benefit from reliable forex signals to guide their strategies.
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