Buy Signal in NZD/USD looks Good, as MAs Keep This Pair Bullish
[[NZD/USD]] has been trading on a bullish trend for quite a long time now, since it reversed higher from the larger downtrend back at the beginning of October. The reason for this reversal was the trade deal comments from US and China, which improved the sentiment and sent risk currencies higher, such as NZD/USD.
On the way down, moving averages used to provide resistance during pullbacks and kept pushing the price lower in this pair. But, they turned into support once the trend shifted to bullish, as is often the case in such scenarios. The 200 SMA (purple) was the first to provide support, then the 50 SMA (yellow) took its place towards the end of last month.
The uptrend picked up further pace at the beginning of this month, after ISM manufacturing report showed that this sector fell deeper into contraction last month, when expectations were that it would improve. That report sent the USD tumbling down and NZD/USD surging higher.
The smaller moving averages, such as the 20 SMA (green), came into play as the trend picked up pace, but we saw a decent pullback lower at the beginning of last week, as the sentiment turned negative and risk currencies retreated lower.
But, NZD/USD found support at the 50 SMA again and at the end of last week, we saw another bullish reversal from the 20 SMA (green), after a small pullback lower. Today, the bulls remain in control and our buy signal here looks to be on the right track.
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