NZDUSD to Resume Downward Trend as Rally Ends in Premium Zone

NZDUSD Analysis – January 1

NZDUSD is set to resume its downward trend as the rally ends at the premium zone. NZDUSD’s price action shows a technical shift, with a significant plunge from $0.65400 in February 2023. A retracement in July saw resistance at $0.64100, followed by an emerging resumption of the downtrend and a Fair Value Gap. However, the bullish order block at $0.61800 may slightly delay the resumption of the bearish trend.

NZDUSD Key Levels

Demand Zones: $0.60600, $0.57700
Supply Zones: $0.64100, $0.65400

NZDUSD Long-Term Trend: Bearish

The recent price behaviour of the NZDUSD presents a strong technical narrative. In February 2023, following a notable decline from the resistance level of $0.65400, the NZDUSD showed a notable turn to the negative, signifying a shift in market sentiment. A strong retreat occurred in July 2023, grabbing BSL (Buy Side Liquidity) until it encountered resistance at $0.64100. After that, there was a quick return to the downward trend, and in July 2023, a Fair Value Gap (FVG) formed. Interestingly, the negative momentum continued, invalidating the previous bottom at $0.59900.

NZDUSD saw a significant increase that reached the Fair Value Gap in the premium zone, driven by intense buying pressure at the $0.57700 demand zone. The last bearish candle before the resumption of the recent bullish move constituted a bullish order block at $0.61800. The bullish order block is likely to induce a delay in the resumption of the bearish trend. However, the market’s trend is still susceptible to change at the premium zone as NZDUSD navigates potential shifts in market sentiment and price patterns.

NZDUSD Short-Term Trend: Bullish

The BOS (Break of Structure) at the $0.62400 high led to an extension of the rally to the $0.63400 price level. According to the MA Cross, a reversal is set to occur as the Moving Averages contrast. The emerging decline is expected to continue into the four-hour bullish order block above the $0.60840 low.

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