NZD/USD price analysis: Confluence resistance 0.6197-0.6224
NZD/USD price analysis. We have a confluence area to the upside between 0.6197 and 0.6224. We look for rallies to be limited
Market highlights of the past week
Friday May 15: There were some conciliatory remarks from China over trade with Australia and commodity prices made further gains on Monday despite underlying trade tensions
Monday May 18: Risk appetite strengthened sharply during Monday with increased optimism over the global outlook and hopes for positive moves towards a coronavirus vaccine
Tuesday May 19: The US dollar lost ground during much of Tuesday as underlying defensive demand for the US currency faded. Commodity currencies made sharp gains and the sharp retreat late in New York attracted cautious buying interest
Wednesday May 20: Commodity currencies still posted net gains but retreated from their best levels
Thursday May 21: The US dollar edged lower with net gains in equities on expectations of very strong monetary support
NZD/USD price analysis
Let us have a look at the technical viewpoint.
Monthly: NZD/USD traded to multi-year lows of 0.5469 in March. Levels under the 61.8 per cent pullback of 0.5786 (from 0.3901-0.8836) have been bought into. April’s price action posted an indecisive Inside Month.
Weekly: Previous swing low from the week of August 24, 2015 is seen at 0.6197. What was support now becomes resistance.
Daily: Mixed price action for the past 27 trading days. Trend of higher highs is seen at 0.6224
Intraday four-hour: We have stalled close to the previous swing high of 0.6156. We have a 261.8 per cent extension level located at 0.6280 (from 0.5920-0.6058)
Outlook: Immediate signals are hard to interpret. We have a confluence area to the upside between 0.6197 and 0.6224. With a stop placed above 0.6280 and targeting 0.5850, this offer a favourable reward against risk set-up
Possible trade set-up
Action: Selling at 0.6200
Potential return on risk to first target: R3.5 (reward 350/risk 100)
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