NZD/USD technical analysis: Under pressure despite bullish turn by key indicator

NZD/USD's daily MACD histogram has turned bullish in first since July 24.
NZD/USD created a long-tailed candle on Monday, signaling seller exhaustion.

Omkar Godbole FXStreet Contributor

NZD/USD has come under pressure in Asia, but the losses could be short-lived as a key trend-following indicator has turned bullish for the first time since July 24.

The moving average convergence divergence histogram, an indicator used to identify trend changes and trend strength, has crossed above zero on the daily chart, confirming a bullish reversal, that is, an end of the sell-off from the July 19 high of 0.6791 has ended and the bulls have regained control.

Supporting MACD's bullish view is Monday's long-tailed candle – a sign of seller exhaustion near 0.6341.

So, the stage looks set for a corrective rally to the former support-turned-resistance of 0.6482 (May 23 low).

So far, however, the pair has struggled to put on a good show. As of writing, NZD/USD is trading at 0.6385, representing 0.10% losses on the day.

The case for the corrective rally would weaken if the pair finds acceptance below Monday's low of 0.6341.

Daily chart

Trend: Bounce likely

Pivot levels

1. R3 0.6482
2. R2 0.6443
3. R1 0.6419
PP 0.638
1. S1 0.6356
2. S2 0.6317
3. S3 0.6293

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD faces next resistance near 1.1930

EUR/USD continues to build on its recovery in the latter part of Wednesday’s session, with upside momentum accelerating as the pair retargets the key 1.1900 barrier amid a further loss of traction in the US Dollar. Attention now shifts squarely to the US data docket, with labour market figures and the always influential CPI releases due on Thursday and Friday, respectively.

GBP/USD sticks to the bullish tone near 1.3660

GBP/USD maintains its solid performance on Wednesday, hovering around the 1.3660 zone as the Greenback surrenders its post-NFP bounce. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold holds on to higher ground ahead of the next catalyst

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of modest losses in the US Dollar and despite firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.