- Summary:
- After reaching it multi-year lows, NZDUSD has attracted enough buyers to form an inverse head and shoulders on the daily chart. Is it headed upwards?
After reaching it multi-year lows, the New Zealand dollar has attracted enough buyers in the market to find support at 0.6400. NZDUSD hit 0.6202 on October 1, the lowest level that the currency has reached since September 2015. Since then the currency pair has consistently made higher highs and higher lows. Will there be enough bulls to sustain it?
The daily chart of NZDUSD reveals what could be an inverse head and shoulders chart pattern with the neckline resistance around 0.6440. It’s currently finding resistance at the 200 SMA. If it holds, we could see NZDUSD trade lower to test support at the rising trend line around 0.6365 (from connecting the lows of October 1, October 16, and November 11.)
On the other hand, there could be enough buyers to push the New Zealand dollar exchange rate higher. A strong close above neckline resistance will mean that the next level for buyers to clear will be around 0.6492 where it previously found support in June 16. If that level does not hold, you can look for the currency pair to test resistance at the falling trend line (connecting the highs of March 25 and July 22) around 0.6620.Download our latest quarterly market outlook for our longer-term trade ideas.