As we can see on daily chart below, NZDUSD has reached key supply zone between 0.7333 – 0.7375. When on the beginning of current year price was last time in this zone there was a strong drop which ended around 0.6825.
Looking on 4-hour interval, we can see a consolidation between the level that sets beginning of supply zone at 0.7333 and local support near 0.7258.
Local support area coincides with the diagonal support line shown on the chart below, which is also additional confluence factor together with fact that price action shows divergence with RSI indications, which can predict change of direction of price move.
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Bearing in mind the above, there is a likelihood of a deeper correction of recent increases. First, however, we must see a definite closure under confluence of support zones, where the area at 0.7258 coincides with trend line.
Potential target for declines in this scenario may be around 0.7080, where demand zone is also positioned on 50% abolition of last growth impulse on daily chart.
