This Kiwi pair has been stuck in a range for quite some time, and it looks like a breakout could be on the horizon.
With NZD scoring 6.1/10 versus CHF’s 6.8/10 in this week’s FX Fundies Cheat Sheet, NZD/CHF could be poised to test its range support and perhaps attempt a break lower.
Here are the technical levels I’m watching.
NZD/CHF 4-hour Forex Chart by TradingView
This currency pair has been pacing back and forth between support around the .4900 major psychological level near S1 (.4880) and resistance close to the .5000 handle and R1 (.4990) since mid-April.
Price is closing in on the bottom of the holding pattern once more, so is it in for a bounce or a break?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the New Zealand dollar and the Swiss franc, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The 100 SMA is still above the 200 SMA on this time frame to suggest that support is more likely to hold than to break, especially since the 200 SMA dynamic inflection point coincides with the bottom of the range.
In that case, look out for another bounce back to the range resistance or at least until the pivot point level (.4940) halfway through. Long green candlesticks closing above the ceiling could reflect sustained upside pressure after a broader uptrend, possibly enough to take NZD/CHF up to the next upside target at R2 (.5050).
On the other hand, candles closing below the short-term range support could indicate that sellers are regaining the upper hand, potentially dragging the pair down to the support zones at S2 (.4830) then S3 (.4760) next.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.