NZDUSD Shows Bullish Reversal Signs

NZDUSD has been on a consistent downward spiral since the head and shoulders pattern completed in August, reinforcing sustained bearish pressure. This bearish drive pushed the price toward the major demand level at 0.55430. However, recent price action has introduced a notable divergence, signalling early signs of a potential bullish reversal. The divergence highlights weakening bearish momentum and suggests that traders should begin monitoring price behaviour closely, especially as a forex signal for upcoming directional changes.

Demand Levels: 0.56440, 0.55420, 0.54730

Supply Levels: 0.6000, 0.61200, 0.63470

As price approached the 0.56440 demand zone, a clear RSI (Relative Strength Index) divergence emerged. While the RSI formed a higher low within the oversold region, price printed a lower low, creating a strong technical indication of waning bearish strength. This divergence was followed by a sweep of the previous high, further strengthening the case for a potential reversal.

Additionally, mid-September’s sharp decline around 0.5950 produced market inefficiency in the form of a fair value gap. This unmitigated region remains a probable price magnet that could attract bullish movement if momentum continues to build.

On the lower timeframe, NZDUSD has posted a strong upward push. The 9-period and 21-period Moving Averages now sit below current price, reinforcing the bullish short-term outlook. If buyers maintain sufficient pressure, the developing ascent could evolve into a confirmed reversal. A decisive shift in market structure will provide further validation, aligning with expectations derived from the earlier forex signal.

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