NZDUSD Analysis – expect more growth despite the decline

We considered NZDUSD about ten days ago when we took a bullish stance on the currency pair and expected it to go up in price. While the price has declined after that statement, we still maintain our outlook as the technical analysis is suggestive of a bullish setup. It might just be delayed, but with patience, we think that it is very likely that the price will pick up.

Currently, the price is in the bearish correction period. While we maintain our view that the current decline is still a correction, it is of a larger scale than we expected. Nevertheless, it follows the logic of technical analysis. The price is currently tracing a flag shown on the graph above with black lines. We expect the price to breach the upper line to trigger a bullish breakout. On the other hand, if the price drops below the lower line of the flag at level 0.678, we will change our outlook for the currency pair and expect more decline. For now, even though the price is below the horizontal resistance at 0.685 shown with an orange line, we still expect more growth to follow.