The NZD/USD pair is facing the resistance of the descending trend line from the September 2016 high of 0.7484 to the February 7 high of 0.7374, now at around 0.7275 on its daily chart. After touching the trend line resistance, the pair pulled back from 0.7319 and formed a sideways movement. All we can do now is to wait for the breakout to occur.
On the downside
Let’s look into its 4-hour chart. The pair recently broke below the bottom support trend line of the ascending price channel, and formed a sideways movement in a trading range between 0.7165 and 0.7319. There is an important support level at 0.7165, a breakdown below this level will indicate that the short term uptrend from the May 11 low of 0.6817 had completed at 0.7319 already, then the pair will find the next support level of the 38.2% Fibonacci retracement, taken from 0.6817 to 0.7319 at around 0.7125. If this level gives way, the following bearish movement could take price into 0.6700 zone.
On the upside
As long as the pair is above 0.7125 Fibonacci support, the pullback from 0.7319 would possibly be consolidation of the uptrend from 0.6817, another rise towards 0.7500 is still possible after the consolidation. Near term resistance is at 0.7319, a break above this level could signal resumption of the uptrend.
Technical levels
Support levels: 0.7165 (important support on 4-hour chart), 0.7125 (38.2% Fibonacci retracement), 0.6817 (May 11 low), 0.6700.
Resistance levels: 0.7275 (trend line resistance on daily chart), 0.7319 (near term resistance), 0.7374 (the February 7 high), 0.7484 (the September 2016 high).