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(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)
Price action on NZD/USD, a daily chart of which is shown, has made a bullish pullback correction after breaking down below a key uptrend support line extending from the March lows. Any breakdown below 0.6240, which was the low point before the pullback, would confirm a continuation of the trend line breakdown, and should easily target strong further support in the key 0.6100 support/resistance region.
In addition, any subsequent breakdown below that 0.6100 level could indicate a major reversal in the current overall uptrend. For the time being, however, this currency pair continues to travel in a sideways consolidation, much like other dollar-based pairs. To the upside, the key level to watch would be the 0.6600 price region, a breakout above which would signify a clear uptrend continuation.
By James Chen, Chief Technical Strategist, FX Solutions
