The daily chart of the NZDUSD pair is showing a strong trend structure with a notable downtrend followed by a medium-term ascending trend channel. Initially, the price action was in a strong downward trend, rising from a high of 0.63570 to near 0.54700. The downtrend was sharp and aligned with the falling moving averages. This suggests that the trend will continue until demand increases and prices stabilize. From this point, a new ascending channel began to form, characterized by higher highs and higher lows. This ascending channel is well-defined and the price action has been within its limits for several weeks, with recent price action testing the upper boundary of the structure. The price is currently approaching the upper resistance level of the ascending channel near the level of 0.59398. This price level is very important as it coincides with a historical resistance area that has often acted as both support and resistance in the past. The fact that the price reached this area after a strong uptrend from the 0.54700 level indicates a possible exhaustion or at least a possible breakout, especially if it coincides with the upper trendline of the channel. A break above this area will lead to the next resistance area at 0.60233, which will act as a major horizontal barrier. Furthermore, the key resistance at 0.63570 represents a significant reversal point from the peak of the previous downtrend. Meanwhile, immediate support is located at 0.57300, near the midline of the ascending channel. This could act as a reaction level as well as an initial buffer level in the event of a small decline within the channel if the price fails to break the resistance level at 0.59398. A strong correction could take the price closer to the lower boundary of the channel near 0.56600. This layer has acted as a dynamic support layer in many successful tests. A break below this support level could refocus the pair towards the 0.54700 level where the recent uptrend began, negating the channel action and resuming the overall downtrend.
According to the trend structure, the price is closely matching the boundaries of the ascending channel. The channel has a gentle slope, which indicates continued upward pressure rather than a parabolic movement that could lead to unsustainable growth. The highs and lows within the channel confirm that buyers are gradually gaining control. However, the recent move towards the 0.59398 level is very impressive and indicates a possible oversold attempt. The recent bullish breakout of the lower channel boundary indicates heavy volume activity and provides additional context. An increase in trading volume during a price change indicates active buyer participation and confirms a price change. However, a sustained increase usually requires consistent volume, and signs of a divergence between price action and volume can be a sign of weak upward momentum. Looking at the indicators, the Relative Strength Index is currently approaching the 66 level, which indicates that it is approaching the overbought zone but has not yet fully expanded. This shows that despite the current upward trend, there is still room for the upward trend to continue before the market enters an overbought state. Meanwhile, the Stochastic indicator is in the overbought zone near the 90 level, which indicates that a short-term pullback is inevitable. The MACD chart shows a bullish crossover with rising bars, which confirms upward momentum. However, the relatively low value suggests that the dynamics are stable and not aggressive. Typically, the current trend structure is described as a rising corrective channel within a broader downtrend. The price is testing key horizontal resistance at 0.59398, which is consistent with the upper trendline of the channel and thus represents a key level. A sustained break above this resistance level could pave the way for 0.60233 and above, while a failed break could trigger selling pressure and test support levels around 0.57300 and 0.56600. Indicators show that the trend is slowing down. This suggests that traders should keep an eye on any potential reversal or consolidation near the current levels, especially given the historical significance of the nearby western trend.
