Overall, NZD/CHF continues to trade below its medium-term tentative downside resistance line taken from the high of March 12th. The pair now managed to distance itself from that line and in the end of May it started moving sideways, roughly between the 0.6530 and 0.6597 levels. For now, we will remain neutral and wait for a clear break through either of the sides of that range, before examining a further directional move.
A drop below the lower side of the aforementioned range, at 0.6530, would confirm a forthcoming lower low and NZD/CHF could drift even further to the downside. Such a move would be in line with the prevailing trend and the next potential support area could be seen near the 0.6490 zone, marked by the lowest point of January. If the rate rebounds from there, but stays below the 0.6530 barrier, this could attract the bears into the field again. If the pair falls below the 0.6490 area, this could clear the path to the 0.6463 hurdle, which is the low of October 26th, 2018.
Our oscillators, the RSI and the MACD, are painting us a slightly confusing picture. The RSI had recently bottomed and shifted higher but failed to push above 50 and now points to the downside again. The MACD had also bottomed recently, but the index got back above its trigger line and flattened somewhat. This is why we will leave our indicators out of the equation for now, until they show us a clear direction.
On the upside, if NZD/CHF breaks above the 0.6597 barrier, which is the upper side of the aforementioned range, this might interest a few more bulls to join in and potentially drive the pair a bit higher, to test the 0.6618 area, marked by the high of May 20th. If the rate-acceleration doesn’t end there, we may see a larger correction to the upside, bringing NZD/CHF above the 0.6618 zone and aiming for the 0.6651 hurdle, which is the low of May 8th. The rate might stall around there, or even retrace back down a bit, but as long as it stays above the 0.6600 area, we will continue targeting slightly higher levels like the 0.6677 mark, which is the high of May 12th.
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