NZDUSD Challenging Critical Resistance Ahead of Major News Announcements

• NZD/USD Daily Timeframe Downtrend: The NZD/USD pair has been on a downward trajectory in the medium-term since breaching below the $0.6070 mark in mid-March. This level is now being retested as resistance, suggesting a crucial juncture for the pair.

• Bullish Acceleration Identified: The break above the $0.6050 resistance level on the 4-hour timeframe has notably accelerated the bullish trend on lower timeframes. This breakout indicates a strong upward momentum, shifting short-term market sentiment to bullish.

• Critical Intersection: The $0.6070 resistance level holds significant importance as it acts as both a target area for the current short-term bullish movement and a pivotal point for the medium-term downtrend. This convergence marks a pivotal level where a notable battle between buyers and sellers is anticipated.

• Response to Resistance: A successful breach above the resistance level could signal a shift from the prevailing downtrend to a return to a sideways range, similar to the market behaviour observed in February and March. Overcoming the resistance level would validate the ongoing bullish trend observed on the 4-hour timeframe, suggesting a continuation towards the next target area at $0.61.

• Importance of Rejection: A rejection at the critical resistance area, especially if accompanied by a recognizable reversal pattern, could significantly impact the pair’s momentum. This scenario would reinforce the medium-term bearish outlook and renew the downward momentum.

• Short Term Support: Immediate support for the NZD/USD pair is identified at $0.6030. This level plays a crucial role in providing a safety net for any pullbacks or corrections following attempts to challenge the resistance zone.

• Upcoming Economic Announcements: The Reserve Bank of New Zealand’s interest rate decision and the U.S. CPI data, due to be released 10 hours apart, are likely to introduce volatility to the currency pair. A higher-than-anticipated U.S. inflation figure might strengthen the U.S. dollar, influencing the NZD/USD trend.

NZDUSD 1 Hour Chart.

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