The NZDUSD pair is displaying a clear bullish trend following the break of the resistance trendline on the daily chart. The market is now poised to target the rich liquidity regions on the sell-side, particularly around the relative equal highs.
NZDUSD Key Levels
Demand Levels: 0.6000, 0.5860, 0.5770
Supply Levels: 0.6180, 0.6290, 0.6360
NZDUSD Long-term Trend: Bullish
The significant price decline below the major low of 0.6120 in January set the stage for a downtrend in NZDUSD, with the formation of lower highs reinforcing the bearish market structure. This downtrend was marked by a series of lower highs aligned along a bearish trendline, prompting sell-offs at each test of the trendline.
However, as the price approached the demand zone at 0.5860, the daily candles began forming higher lows, indicating a shift in momentum. Notably, while the price made a lower low, the RSI (Relative Strength Index) formed a higher low, signaling underlying strength. This divergence, coupled with a bounce off the 0.5860 demand zone, suggested a failed low and a potential reversal. The swing low at the beginning of May was higher than the previous low, confirming the bullish shift. The RSI now shows a strong upward trend, which aligns with bullish signals from the Smoothed Heikin Ashi Candles.
NZDUSD Short-term Trend: Bullish
In the short term, a double top pattern is evident at the supply zone of 0.6180. The relative equal highs at this level are attractive targets for forex traders. While a pullback to the 0.6000 demand zone, where a bullish order block is located, is possible, the overall expectation is for the price to advance towards the 0.6180 supply zone shortly.
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NZDUSD Short-term Trend: Bullish
