Chart of the Day: Trendline Holds For NZDUSD

NZDUSD is approaching a support trend line in place since October 2022.

Market Analyst
Apr 18, 2024
Quick Tip:  The DXY is also in an overall uptrend at the moment, which makes this push from NZDUSD a divergence.

As we discussed in our previous analysis of NZDUSD, it was approaching a significant trendline spanning over 3 years. Upon initially losing the level at approximately $0.59, NZDUSD has reclaimed it the next day.

Currently, the Kiwi dollar is showing its resilience and holding above the major trendline. It’s even pushed above its previous day's highs at $0.59254 for today.

Scenarios:

  • If NZDUSD holds, it may rally to retest the pivot high around $0.606.
  • If NZDUSD holds $0.606, we may continue to rally even higher to the top of the triangle.
  • If NZDUSD breaks below the support trendline, we may retest the October 26 low of $0.57 or lower.

DXY Dollar Index Chart

Now, turning over to the DXY (Dollar Index Chart), we can see a divergence forming between NZDUSD and the DXY.

The DXY is technically strong, with the index forming a higher high on Monday. Depending on where the price goes, we could see a reaction at the support area of 105, or a rejection at 107.

It would be interesting to watch for a posible rejection on the DXY, which would fuel NZDUSD to push higher.

Conversely, if DXY drops lower and bounces at 105, we may see NZDUSD retest $0.606 initially, only to get rejected once again.

Disclaimer:  For educational purposes only. Trading comes with substantial risk, leading to possible loss of your capital. Traders are advised to do their own due diligence before investing.