TECHNICAL ANALYSIS
On the daily chart, The NZDUSD pair is showing a significant divergence with the MACD indicator, which is typically indicative of a weakening momentum, often foreshadowing potential pullbacks or reversals. In this particular scenario, we've witnessed a pullback to the previously breached support-turned-resistance level, possibly forming a classic "break and retest" pattern. If the price continues to climb and surpasses this resistance, it would serve as confirmation for a potential reversal, and the NZDUSD pair could embark on a rally, possibly reaching the trendline. On the 4-hour chart, we observe that the recent breach of a minor trendline and the crossover of moving averages have tilted the bias more towards the upside. However, it's essential to consider that this could be a complex correction, and sellers may enter the market near the resistance level, setting defined risk levels above it in preparation for a potential decline to new lows. Conversely, buyers would be looking for a price breakout above this resistance to join the market and start targeting the major trendline, located around the 0.5980 level.Examining the 1-hour chart, it becomes evident that MACD divergence has been ongoing for some time. In the event that the price manages to break above the key resistance level, the initial target of this divergence is the swing high situated around the 0.5925 level. Much hinges on how the price reacts at this critical resistance point. A breach below the recent higher low at approximately 0.5838 would likely alter the market structure on this timeframe back to a bearish outlook and potentially intensify downward momentum, leading to a drop to new lows.
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