Market Analysis – The NZDUSD Remains Within Its Range During the Consolidation Phase
NZDUSD consolidation phase is set to last a little longer. The market has been locked in a consolidation phase since the end of last year. On the 5th of November 2020, the price rose in a bullish pump from the 0.6600 key level. The strength of the pump helped the market easily bypass 0.69400 in its upwards trajectory. The only major retracement came on the 18th of December 2020.
NZDUSD recovered and continued upwards till it reached a 2 year high of 0.73100 on the 7th of January 2021. The buyers at this point got exhausted and the market slumped. After a tussle with the seller, NZDUSD finally fell to the 0.71050 support. The price rallied once more to maintain its bullish momentum, and it broke through the 0.73100 resistance. However, the market could only make it as far as the 0.74600 key level before the sellers were weakened and the market dipped through to the 0.71050 support level. Thereafter, the bulls failed to fully revive, and the market fell sharply to the next support at 0.69400.
Subsequently, NZDUSD gradually built its momentum upwards again. It got past 0.69400 and sprang off it to retest the resistance at 0.73100. It got repelled and, after failing two other times in a mini consolidation phase, the market eventually dipped back to 0.69400. The buyers immediately tried to rally again, but the 0.71050 key level had been strengthened to resist the market and the price fell. NZDUSD is currently on the descent after the 0.70150 key level resisted it. There are consecutive bearish candles on display to that effect.
The ATR (Average True Range) indicator displays the strength/weakness in the volatility of the market. It demonstrates that the market’s strength is currently in decline. This assures us that, except for a sharp increase in volatility, the market won’t break through the 0.69400 support to go lower but will bounce back up to reappraise the 0.71050 key level to continue in its consolidation phase. The MACD (Moving Average Convergence Divergence) indicator shows the general trend as bearish, but its decreased histogram bars suggest that a bullish movement is imminent.
NZDUSD Key Levels
Resistance Levels: 0.73100, 0.71050
Support Levels: 0.69400, 0.68000
What to Expect From the NZDUSD Consolidation Phase
The market is seen to have bounced off of the 0.71050 key level to go lower. The ATR indicator shows steeply decreasing market volatility from the 18th of June 2021 to the current time. The MACD shows significant increases in bearish histogram bars, indicating that the market is on the decline.
The market will continue in its consolidation phase, but it may have to reach 0.69400 for support before springing up again.
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