NZDUSD Returns To Discount As The Market Structure Shifts Upward

NZDUSD Analysis: Returns To Discount As The Market Structure Shifts Upward

NZDUSD returns to a discount as the market structure shifts upward. The recent upsurge in price has caused a structural shift in the market. The bulls have taken over as the buying momentum overwhelms the market’s order flow. If the diagonal support remains valid, we can anticipate a bullish outlook for NZDUSD.

NZDUSD Significant Zones
Demand Zones: 0.59850, 0.58400
Supply Zones: 0.63810, 0.65380

The market was in a bearish trend through the year’s first two quarters. The bearish trend began after the creation of a double top at the 0.65380 price level. In February 2023, the NZDUSD experienced a shift to bearish sentiment as the bullish structure was invalidated, as indicated by the MA (Moving Average) Cross. On March 7, 2022, a swing low formed at the 0.60860 price level, after which the price made an upward correction. The upward correction ended as the price bounced off the 0.63810 resistance.

The bearish trend did not continue until the price bounced off the 0.63810 resistance twice. Following the bounce off the 0.63810 resistance, the price crashed massively to induce sell-side liquidity below the 0.59850 low. A reversal occurred immediately after the inducement. This caused an upsurge alongside an emerging rising trendline that eventually shifted the market structure. The previous trading range on the daily chart was between 0.62480 and 0.59850 price levels. The breakout from the trading range caused an extension of the rally to the -50.0 Fibonacci extension level.

Market Expectation

A breakout occurred from the triangle pattern which formed last week on the four-hour chart. Following the breakout, NZDUSD expanded upward to create a swing high at 0.64120. The bears exiting the market are expected to result in higher highs and lows.