FX.co ★ NZD/USD: Approaching multi-month resistance, potential reversal expected on weekly basis

NZD/USD & AUD/USD declined to 0.6495 after China's disappointing CPI.

NZD/USD. On a monthly basis, strong U-TURN is expected downward as a correction to 0.6240 and 0.6000.

NZD/USD has managed to come back below the long-term trend line (Pre-COVID 19 Resistance) from a multi-year low of 0.5450. Currently, NZDUSD outlook is cautiously bullish as the price hit a 4-month HIGH of 0.6540 (Below Trend line).

We could have another long opportunity if NZD/USD closes or breaks above 0.6575 and stabilizes above the 0.6570- 0.6590 area. This scenario could announce an increase also towards the R2 (0.6730) level.

Another short opportunity could appear if NZD/USD decreases and closes below the 0.6510 previous low. On the daily and weekly basis, the price is showing weakness. In the coming weeks, the pair is expected to make some downward correction towards the support level of 0.6250. A breakout of 0.6240 with a huge separation above the 0.6157 - 0.5940 area will bring a short opportunity as well.

SUPPORT/RESISTANCE

S1= 0.6240

S2=0.6000

R1=0.6540

R2=0.6730