As can be seen in the daily chart below, the NZDUSD currency pair reached this week’s key support at 0.7434, where is maximum from September 2017. There also appeared supply, and as a result two bearish pin bars occurred pointing to the potential for corrective movement.
Today, however, kiwi prices are gaining strength and perhaps the maximum of yesterday’s pin bar will be tested. An effective closing over 0.7434 would invalidate the importance of this resistance and open the way to last year’s high at 0.7557.
We should also focus on a 4-hour chart, where the situation looks quite interesting. Price tested there local horizontal support 0.7314, which coincides with the upward trend line running from the low from December 20th.
So far, the test seems to be positive, but if the supply side again comes to play, after breaking the support confluence and closing under the last low at 0.7288 you can expect a deeper correction movement. The nearest important area of defence will then be between 0.7125 / 43. It covers a 50% elimination of the range of last move measured from the low from December to the current maximum.
