This is via National Australia Bank technical analysis, the bank remains bullish
Trend
- The 2017 uptrend peaked in dramatic fashion in February, holding a multitude of traits that we associate with a major turning point. The decline from the February high amounted to 7.5% and has bottomed at the base of a corrective channel in place since Q4 2016. May produced a bullish five-week reversal pattern that completed the interim downtrend. The subsequent upswing has been impulsive, breaking key resistance at 0.7080/0.7120 and opening up a test of the correction channel top at 0.7340/60. This is seen as a likely interim target. The monthly close above 0.7005 in May completed a bullish LT reversal pattern and further confirmed that the multi-month downtrend is complete. This close clarified the uptrend bias and set up a high probability multi-week uptrend. Response to 0.7340/60 will determine the sustainability of the uptrend.
Momentum
- MT momentum structure has changed dramatically in late May with key weekly indicators shifting to a positive bias for the first time since February. The recent topside RSI breakout adds further weight to the MT uptrend bias.
Outlook
- Our NZD/USD outlook remains bullish and we note that our 0.7340/60 target has significant upside risk. Bullish weekly and monthly closes in May have laid a strong foundation and a series of bullish MT momentum triggers highlight an increasingly positive environment. A weekly close above 0.7340/60 will imply that the uptrend has much more to do on a multi-week to multi-month basis. Only a weekly close below 0.7134 would place the immediate uptrend at risk.
(note dated June 14)
