Overview
The NZD/USD pair shows interesting movements across different timeframes based on the latest technical analysis. With a long-term weakening trend, traders can take advantage of price movements by applying the right strategy. This analysis covers the 1-hour (1H), 4-hour (4H), and daily timeframes, focusing on trends, support and resistance levels, and technical indicators such as SMA and Stochastic RSI.
NZD/USD Analysis on 1-Hour (1H) Timeframe
Trend
On the 1-hour timeframe, NZD/USD is currently in a short-term downtrend. The SMA 9 (blue line) is below the SMA 20 (orange line), indicating consistent bearish pressure.
Support and Resistance
- Nearest support: 0.5800, a strong psychological level that has been tested multiple times.
- Nearest resistance: 0.5838, aligning with the SMA 20, which acts as a dynamic barrier.
Technical Indicators
- Stochastic RSI: The indicator is in the oversold area (15.18), suggesting a potential short-term rebound, although the main trend remains bearish.
- Volume: Trading volume remains stable with minor spikes near the support level.
NZD/USD Analysis on 4-Hour (4H) Timeframe
Trend
On the 4-hour timeframe, the downtrend is more evident. The SMA 9 is also below the SMA 20, showing dominance from sellers over the past few days.
Support and Resistance
- Key support: 0.5785, a level that has not yet been breached despite significant bearish pressure.
- Key resistance: 0.5845, a level coinciding with the SMA 20 on this timeframe.
Technical Indicators
- Stochastic RSI: Currently at 60.28, indicating limited bullish momentum and the likelihood of price weakening after a brief recovery attempt.
- Volume: Trading volume increases near the resistance level, signaling selling activity at those levels.
NZD/USD Analysis on Daily (1D) Timeframe
Trend
On the daily timeframe, NZD/USD remains in a long-term downtrend. This is supported by price consistently moving below the SMA 20 and forming lower highs over the past few months.
Support and Resistance
- Key support: 0.5750, a significant lower boundary if bearish pressure continues.
- Key resistance: 0.5863, a level that failed to break in the previous week.
Read: How to identify support and resistance
Technical Indicators
- Stochastic RSI: The indicator is near the oversold area (19.89), suggesting a potential short-term pullback, although the main trend remains bearish.
- Volume: Trading volume is lower than in previous sessions, reflecting a lack of buyer interest at current levels.
NZD/USD Price Predictions
- Short-term: Prices are likely to pull back to the nearest resistance (0.5838 on the 1H timeframe) before resuming their decline.
- Long-term: The bearish trend will remain dominant as long as the price stays below the key resistance level (0.5863).
NZD/USD Trading Recommendations
Based on the analysis above, here are the trading recommendations for the NZD/USD pair:
- Recommended position: Sell
- Entry point: 0.5825 (pullback area near 1H resistance)
- Take profit (TP): 0.5785 (key support on the 4H timeframe)
- Stop loss (SL): 0.5850 (above key resistance on the 4H timeframe)
Reasons:
- The main trend across all timeframes is bearish.
- SMA and Stochastic RSI indicators confirm selling pressure.
- Support and resistance levels provide clear entry and target points.
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