By: Mike Kulej
On Tuesday, the NZD-USD came within few pips to 0.7500, which is a very important psychological level here. Not only because of a round number, but it also happens to be the highest level in 2010, a new yearly high.
This always gets more attention from the market participants. So far, the uptrend is intact - the price is making new highs, it remains above the main trendline and the 100 SMA. All positive signs, suggesting that the NZD-USD has a good chance of testing the next important resistance at 0.7660, a high from 2009. So far so good.
There are signs, however, that this pair is losing the upward momentum. On the daily chart, we can see that during the last two weeks the NZD-USD has not had two consecutive positive days. Not a sign of a healthy trend.
In addition, both the ADX and the Momentum indicators have flattened recently and are not following the price any more. Put together, the technicals suggest a somewhat limited upward potential for the NZD-USD, perhaps no higher than the 0.7660 resistance.
If the market develops one of the candlestick reversal patterns, it should be taken seriously, because in these conditions could a correction could follow.
