NZD/USD long-term technical analysis

Weakness in NZA/USD recedes after it prints fresh low at 0.6421 in October last year. The pair launched higher in November and surpassed four-month high. In December the bull attempted to bring NZD/USD higher but failed. However, the situation changed radically in January.

We have a major change in the Fed interest-rate outlook where the central bank said it will be patient on future rate-hike. It is an extremely dovish remark and caused a pullback in U.S dollar. Aside from the Fed, the market also focuses on U.S-China trade war which paused since December last year. Both countries currently under talk to avoid the continuation of the trade war.

Under the current situation, it looks like the market will wait for the result from trade talk and The Fed outlook each month which suggest a sideways trend. Next long-term trend will depend on the result of trade talk.

New Month

Monthly chart

After the pair broke below the trendline support, it tested the level near 0.6400 before making upward correction. Currently, we have NZD/USD back near the trendline intersection. There is no clear direction yet, will the pair rejected from the trendline? Alternatively, will it continue upward and break free from the current bearish outlook?

Weekly chart

The pair direction on the weekly chart is similar to the monthly chart. There is a yellow resistance area which holds the pair from moving higher. Since last year June breakout below the area, NZD/USD never manage to close above the area. Without any close above the area, traders could expect NZD/USD to continue lower.

Daily chart

We have a triangle consolidation pattern on the daily chart. The pair soon will test the top of triangle consolidation and trader could look for short positions. As the trend sideways, traders could adopt ranging strategies by trading the triangle.