Wed, Feb 01, 2023 @ 09:37 GMT
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NZDUSD Breaks Above 0.7400, Bullish Bias In Place But Overbought

NZDUSD has extended its uptrend, breaking above the key level of 0.7400 and reaching a fresh ten-month high. Meanwhile, the short-term bias remains bullish but is likely to weaken.

Looking at the technical indicators, the bias in the near-term is expected to be bullish. The pair has already crossed above the Ichimoku cloud, the 50-day and the 200-day exponential moving averages, which are currently positively sloping. However, the bias is likely to become weaker, as the bullish cross between the Tenkan-sen and the Kinjun-sen has occurred below the cloud, whereas the RSI despite moving positively above 50 has recently entered the overbought area.

In case the price continues rising, a resistance would be first found at 0.7484 which is the highest price reached since September 2016. A violation of this point would meet the area around the psychological level of 0.7500, which was also tested previously back in 2015, and might post a long-term uptrend. Further movements to the upside would potentially target the zone around the key level of 0.7600.

Should the pair head down, an immediate support would be provided by the key-point of 0.7400. From here, any declines would touch the Tenkan-sen mark of 0.7385, whilst a deeper fall would divert attention to the area around 0.7300, where the 50-day EMA and the Ichimoku cloud are also located.
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