NZDUSD advanced strongly yesterday, driving the market towards a fresh five-month high around 0.6885. Currently, the pair holds slightly below this peak, but the 20- and 40-simple moving averages are confirming the upside momentum as they recorded a bullish crossover in the 4-hour chart. Moreover, the RSI indicator is moving higher, approaching the overbought zone and the MACD oscillator is strengthening its movement above the trigger and zero lines.
If the bulls continue to have control, the price could surpass the five-month peak and head towards the next immediate resistance of 0.6920, identified by the high on June 25. A potential upside violation of this region could open the door for the inside swing bottom of 0.6955, reached on June 1. Even higher, the next psychological level is coming from the 0.7000 resistance.
In case of declines in the pair, an immediate support area may come from the moving averages crossover near 0.6800. If the sellers manage to push below that hurdle, that would mark a drop towards the 23.6% Fibonacci retracement level of the upward movement from 0.6423 to 0.6885, around the 0.6776 support.
Overall, the short-term outlook appears bullish following the considerable move up in recent sessions.
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