NZDUSD climbs higher supported by the hawkish RBNZ

Overnight RBNZ made a decision to increase interest rates by 75bp, which drove the rates to the levels unseen since 2008. Along with this decision, we received bullish comments in the statement and during the press conference – we should thus not be surprised that NZD is currently trading higher. In today’s analysis, we will focus on the NZDUSD, where we are one small step from a major buy signal.

NZDUSD was in a downtrend from February 2021 and this drop accelerated in April of this year. Bear market lasted until the middle of October, when buyers initiated a reversal. Why do we consider this a possible end of a bear market? To sum up, on November 11, price managed to break the down trendline (connecting lower highs since April) and at the same time, breaking above the 38,2% Fibonacci – a great bullish combination here.

In the last few days, price was drawing an ascending triangle pattern. This formation, when drawn after a rise, is promoting a rise as well. Hawkish RBNZ was a great asset here and definitely improved the mood on this pair. Early stages of the American session bring us a bullish attack and a legitimate attempt to break the upper line of the triangle. If buyers can close a day above the orange area, we will get a proper, long-term buy signal. As for now, it looks like buyers will succeed.