Technical Analysis – NZDUSD bulls breach upper bound of Ichimoku cloud, eyeing 200-SMA
Posted on October 17, 2019 at 8:48 am GMT
Anthony Charalambous, XM Investment Research Desk
NZDUSD buyers pushed off the 100-period simple moving average (SMA) and above various obstacles moving out of the Ichimoku cloud. The recent rally looks to shift the bias by climbing above the 200-day SMA, despite an overall short-term neutral picture prevailing, as indicated by the horizontal SMAs.
The short-term oscillators reflect a kind of neutral state but lean slightly towards the positive picture. The MACD, in the negative zone has moved above its red trigger line and is nearing zero, while the RSI has turned up off its neutral mark. Moreover, the bearish crossover between the Tenkan-sen and Kijun-sen lines is still valid and traders need to be cautious if sellers pick up again.
In the positive scenario, the bulls face a challenging resistance at the 0.6323 level, which is the 50.0% Fibonacci retracement of the down wave from 0.6443 to 0.6200 and where the 200-period SMA lies. Overtaking this level could have the price test the 61.8% Fibo of 0.6350 and nearby resistance of 0.6360. Moving higher, the 76.4% Fibo of 0.6386 could provide some downside pressure before the October 2018 resistance of 0.6423 draws attention.
If the sellers resurface and drive the price back into the cloud, a support region from 0.6300 to 0.6290 – being the 50- and 100-period SMAs current levels – could halt further declines. Falling below the cloud, the 23.6% Fibo of 0.6260 could test the bears ahead of the 2015 low of 0.6235.
In brief, the short-term neutral-to-bullish bias prevails, and a move above 0.6360 would confirm the bullish view.