NZDUSD: On an Upward Trend, but with Some ConsiderationsGreetings, fellow traders! The past week proved to be just as volatile as the preceding one. After two weeks of trading, the bulls and bears seem to have reached a stalemate. The news from RBNZ initially caused the exchange rate to drop, but it subsequently rebounded by more than 2000 pips throughout last week.
Following the breakthrough of the downward trend's high on February 20th, there is technically an upward trend in place. However, it's important to note that the growth spurts are accompanied by deep corrections, indicating that the upward momentum may not be as strong.
While the growth seen this week is undeniably impulsive, there are a few key points to consider. Firstly, the high did not surpass the previous peak of the trend. Secondly, an unusual configuration of two consecutive market imbalances has emerged on the daily chart.
A similar scenario unfolded in early November last year and was resolved by closing these imbalances prior to the continuation of the upward trend that persisted until the end of the year:
The overbought signals generated by our trading strategy indicators are also contributing to the downward pressure.
We are currently exploring the possibility of an even deeper retracement into the 0.6050-0.6200 range. Our anticipated point of a decline's completion is around the 0.6110 level, which corresponds to the closure of the lower imbalance.
At present, we have entered two sell positions at 0.61539 and 0.61888. We are preparing to close these positions, with a tentative target date around Tuesday, March 12th.
