Price Analysis – NZDUSD Continues to Undulate in the New Consolidation Phase
NZDUSD has continued in its new phase of consolidation. The market had been jacked up by a bullish surge from the 2nd of November 2021 to the 3rd of December 2021 and it easily bypassed the 0.69400 resistance.
The price met stronger resistance at 0.71050, which caused it to retrace, before retesting the supply zone. The price went through the second time of testing only to fall below before finally moving to the next supply at 0.73100, which is a weekly resistance. The weekly resistance kept NZDUSD in a mini consolidation phase for 32 trading days, after which the buyers gained strength to push through.
The market could only reach a height of 0.74600 before facing rejection. A bearish engulfment ensured that the price fell back through 0.73100 to reach the 0.71050 demand. The bulls tried to rally again, but they eventually lost out totally when the price slumped heavily. It took only 0.69400 demand to keep the price up.
NZDUSD took advantage of the support afforded it to gradually make a new upward move. The price effortlessly went through the 0.71050 key level to reach the 0.73100 weekly resistance. Another mini consolidation ensured where price undulated between the 0.73100 weekly resistance and 0.71050 support. Buyers tested the resistance three times before losing the tussle to the sellers. The price fell directly back to the 0.69400 resistance.
NZDUSD is expected to bounce back off the 0.69400 support to launch a new assault on the weekly resistance at 0.73100. The market closed yesterday with a strong bullish candle, and the price is expected to rise further today.
The RSI (Relative Strength Index) has its signal line bounce off the 30 mark upwards, just before the oversold region. The Stochastic indicator can also be seen trying to climb out of the oversold region. Both the green and the red signal lines are seen facing upwards. Both indicators show that the NZDUSD is set for a bullish foray.
NZDUSD Significant Zones
Supply Zones: 0.73100, 0.71050
Demand Zones: 0.69400, 0.68000
What to Expect as NZDUSD Passes Through the New Consolidation Phase
The market has bounced off the lower border of the consolidation zone. This consolidation phase is set to continue unless the bears overpower the bulls to drive the market further down.
The market is generally on an uptrend despite the current retracement. On the 4-hour chart, both the Stochastic Oscillator and the RSI have all their signal lines out of the oversold region and moving upwards, showing there is still great scope for bullish activities.
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