The NZD/USD pair is currently testing the upper limit of its sideways range, with potential for a breakout to the upside. If the pair surpasses the August 20 high, it could confirm a bullish trend with significant gains in sight, possibly reaching the 0.6400s.
NZD/USD 4-hour Chart
On August 20, the pair briefly exceeded the range ceiling, hitting a high of 0.6248 before retracing and forming a bearish Gravestone Doji candlestick. Despite a brief dip to the August 22 low of 0.6109, NZD/USD quickly rebounded, breaking out of the range on August 23.
If the pair manages to surpass the 0.6248 high, it could signal a clear breakout with an upside target of 0.6448 (bold rectangle) or 0.6409 (December 2023 high). This move would likely shift the short-term trend from sideways to bullish.
However, a break below the 0.6109 low would indicate a continuation of the sideways trend, potentially leading to a decline towards the range lows in the 0.5850s.
Analysis:
The NZD/USD pair is at a critical juncture, with a potential bullish breakout on the horizon. Traders should watch for a decisive move above the August 20 high as a confirmation of the uptrend. This breakout could lead to significant gains, making it an opportune time to consider long positions in the pair. Conversely, a failure to break above the range ceiling could signal a continuation of the sideways trend, prompting caution in trading decisions. Stay informed and monitor price movements closely to capitalize on potential opportunities in the NZD/USD pair.