Long on NZD/USD at the 50 MA, Rinse and Repeat
[[NZD/USD]] has turned pretty bullish since early October, as the sentiment improved after comments regarding the Phase One deal between US and China. Risk assets such as stock markets and commodity Dollars benefited from the shift in the sentiment, following a heated summer, which had kept risk assets under pressure.
Moving averages were providing resistance on larger time-frame charts such as the daily, but they got broken one after the other and last week it was the turn of the 200 SMA to let go. That has put buyers in total control; so the upside is the way to go for this pair, until the situation changes.
Although, comments from Donald Trump recently that the trade talks with China are going well as well as Bloomberg’s report that the Phase One deal would be official by the end of this week improved the sentiment further and they are keeping risk assets bullish. If the partial deal becomes official indeed, then we will likely see a surge in commodity Dollars.
So, NZD/USD has been bullish and during last week the 50 SMA (yellow) provided support a few times, pushing the price higher. This shows that the trend is pretty strong, since the smaller period MAs are into play now and buyers aren’t waiting for larger MAs to catch up.
We opened a couple of buy signals in NZD/USD last week and decided to do so again earlier today, as this pair is finding support at the 50 SMA again on the H1 chart, after the retrace lower this morning. The stochastic indicator is oversold now, so the retrace is complete on the H1 chart and we should see a bullish reversal soon.
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