A symmetrical triangle has been forming on the daily chart since the second half of May as a result of two converging trend lines. Furthermore, bulls should be cautious given the recent repeated failures above the 100-day Simple Moving Average (SMA). Therefore, it would be prudent to wait for some follow-through buying and sustained strength above the 0.6200 mark before positioning for any further appreciation. In other words, NZD/USD might test the 0.62800-0.6285 supply zone, or May's monthly swing high, once it clears 0.6235.
As for downside protection, the 0.6140-0.6130 area now appears to protect us before 0.6100. 0.6070-0.6065 is currently pegged as good support along the lower end of the triangle. NZD/USD could reach the psychological level of 0.6000 if the pair breaks below. There is potential for further near-term losses if further selling occurs below the YTD low.
As for downside protection, the 0.6140-0.6130 area now appears to protect us before 0.6100. 0.6070-0.6065 is currently pegged as good support along the lower end of the triangle. NZD/USD could reach the psychological level of 0.6000 if the pair breaks below. There is potential for further near-term losses if further selling occurs below the YTD low.
