NZDCHF Daily Chart Analysis The NZDCHF daily chart illustrates a broad recovery pattern that commenced after a steep drop in mid, November. On the 12th of November, the price created a notable swing low at around 0.4480, resulting in a long bearish candle which effectively completed the previous down leg. That level of support then became a structural base. Between 13th and 28th November, the pair made higher lows and highs, thus confirming the short-term trend change. On the last day of November, the price aggressively moved up and tested the 0.4610, 0.4620 area, thus making the first significant resistance level after the reversal. Later on, this level was confirmed as the point where the price had multiple reactions. Momentum was quite strong at the start of December. Bullish candles on Dec 4 and 5 extended gains towards 0.4650. Nonetheless, a steep bearish rejection was seen on 8th December from the vicinity of 0.4660, creating a lower high when compared to the late November rally. Consequently, the move initiated a correction phase. The pair gradually retraced following the 9th to 18th December; the process entailed a pattern of lower highs; however, the support above 0.4560 was not broken. On 18th December, the price came down to 0.4570, but the buyers stepped in to defend the rising trendline that started from the November 12th low. This valid ascending pattern, therefore, suggested that the broader recovery trend had not been broken by the pullback. The following impulse started on 23rd December, when the price made a strong bullish candle from nearly 0.4580. By 30th December and 2nd January, the pair was once again trading above 0.4600. On 5th January, after a minor downward spike, the price made a higher low at the region of 0.4550, 0.4560, thus the ascending trendline was supported again. This low turned out to be very important as it kept the series of higher lows from 12th November intact. Between 6th and 21st January, the market was constantly going up. A large bullish candle on 21st January pushed the price up to 0.4680, thus breaking the high of early December and confirming the continuation pattern. The most powerful high of this pattern was made on 29th January, when the price went up close to 0.4700. This level became the highest point of the current uptrend. The jump from the low of 12th November near 0.4480 to the high of 29th January near 0.4700 was a clear bullish leg. But after 29th January, the momentum started fading. From 30th January to 6th February, the price candles were volatile with long wicks, indicating that the prices were being distributed around 0.4660 and 0.4680. The market was gradually going lower as sellers exerted more pressure. On 6th February and 7th February, bearish candles pushed the price back to 0.4620, which coincides with the 38.2% retracement of the rally from November to January. This Fibonacci zone is in line with the resistance of 28th November, which was turned into support. Therefore, the reaction here has technical significance. Between 10th February and 16th February, the price moved sideways between 0.4610 and 0.4650 and thus consolidated the daily price action. The 50.0% retracement at about 0.4590 lies below and serves as secondary support. If the price breaks below 0.4590 with a strong close, the structure change would be from higher lows to probable lower lows on the daily timeframe. Momentum indicators are in line with this transition phase. Since early February, the MACD histogram has been flat, which means decreased bullish momentum compared to the strong expansion of around 21st January. RSI fluctuates around the mid, 40s to 50 range, thus it shows neutral conditions rather than strong buying pressure. This corresponds to the consolidation pattern visible in the price movement. At the moment, the main trend from 12th November to 29th January is still considered to be bullish as the significantly higher low on 5th January at around 0.4550 hasnt been broken. Nevertheless, the short-term pattern from 29th January indicates that lower highs are being formed under 0.4700. The nearest resistance is at 0.4650, then 0.4680, and finally 0.4700. The first support level is at 0.4610-0.4620, and afterwards 0.4590, and the ascending trendline is close to 0.4560. Thus, the price graph suggests that a bullish movement has been fully experienced, and a pause for consolidation following a correction has ensued. Provided that the price stays above the 50.0% retracement and continues forming higher lows above 0.4550, the overall recovery bias can still be considered justified. It is quite probable that a daily close above 0.4680 would lead to the reactivation of the bullish trend, whereas a break below 0.4550 would indicate that the trend is changing structurally and a deeper correction is coming.
