NZDUSD continues the run higher, but may run out of some steam

Technical Analysis

5 days up this week. Outside day/higher close on Tuesday helped the bias.

The NZD is the strongest currency today. The NZDUSD is up 0.93% or 60 pips currently. 

For the week, looking at the daily chart above, the pair has seen 5 up days. The pair did reach the low on Tuesday. The pair did bottom with an outside day, higher close.  The low was the lowest level since September 2015. That helped to turn the tide, that helped propel the pair higher this week (see post from earlier this week outlining levels for the run higher). 

The pair today, has the biggest gain and in the process has been able to extend back above the October 2018 swing low at 0.64236. We currently trade around 0.6432.  That is close risk on the daily (not the end of the world on a dip below). On the topside, the 38.2% of the move down from the July high comes in at 0.64678. The low from May and June come in at 0.6480 and 0.6486 respectively.  

Drilling down to the hourly chart below, the pair moved above a topside channel trend line (at 0.6439) today, and also above a swing area at 0.6420-28. The extension above the topside channel line and move back below, may be an “over bought” signal.  Look for the potential for some profit taking against the area.  A move back below the 0.6420, would give the sellers some breathing room (and a little confidence).  The break would also move the price back below the October swing low at 0.6423 from the daily chart.  

NZDUSD on the hourly is testing a topside trend line

Overall, however, for the week, the price has had a good run.  There is work to do by the bulls that may need some consolidation. We will see how the price reacts here for traders looking to pick a top.  

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