NZDUSD Is Set to Resume Its Uptrend as Price Approaches Discount Zone

NZDUSD Analysis – January 8

NZDUSD is set to resume its uptrend as the price approaches the discount zone and the oversold state, according to the Stochastic Oscillator. The bounce off the $0.6410 resistance led to an increase in selling momentum, causing the price to reach the demand zone at $0.5770. The market then entered a new upward trend within two rising trendlines. The market is approaching an oversold state, with NZDUSD likely to resume its uptrend.

NZDUSD Key Levels

Demand Zones: $0.6060, $0.5770
Supply Zones: $0.6410, $0.6540

NZDUSD Long-Term Trend: Bearish

Following the bounce off the $0.6410 resistance, NZDUSD made a rapid decline into the discount zone. The rapid decline led to increased momentum, causing the price to cross the $0.6060 price level to the downside. NZDUSD kept forming lower lows until it reached the demand zone at $0.5770. Before the bounce off the $0.6410 in July 2023, NZDUSD was clearly fluctuating. The fluctuation ranged between the $0.6060 and the $0.6410 price levels. A reversal eventually occurred from the demand zone at $0.5770. The reversal birthed the bullish order block, which led the market into a completely new trend in an upward direction.

The upward trend that emerged remained within two rising trendlines. One was acting as diagonal resistance and the other as diagonal support until recently. The current trading range of the market is now between the $0.6080 swing low and the $0.6370 swing high. The diagonal support has been breached, given the price’s further decline into the discount zone of the current trading range. According to the Stochastic Oscillator, the market is already approaching the oversold state. NZDUSD is likely to resume its uptrend from the 79.0% Fibonacci retracement level.

NZDUSD Short-Term Trend: Bullish

Following the invalidation of the diagonal support, the price formed a double bottom at $0.6180 on the four-hour chart. According to the MA Cross, the market is currently bearish. However, the FVG (Fair Value Gap) in the discount zone is expected to cause a resumption of the uptrend.

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