NZDUSD ended a 7-day rally at 0.6646 on Wednesday, reaching the highest level in six weeks. RSI is still in bullish territory and not overbought yet so there is scope for a move towards the 38.2% Fibonacci retracement level at 0.6749. This is the retracement of the 0.7743 – 0.6139 downleg. Other technical signals that support a bullish near term bias include the fact that the market is above the daily Ichimoku cloud and the tenkan-sen is above the kijun-sen line. Immediate support lies with the top of the cloud and the 23.6% Fibonacci line at 0.6516.
In the bigger picture though, NZDUSD has been in a downtrend and consolidating near six-year lows. Unless prices move above 0.6749 (38.2% Fibonacci), there is no clear indication of a shift in the general bearish outlook. Breaking below the range floor of 0.6235 would strengthen the bears.
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