Trying to get out of the max limit

• NZD/USD is testing its range ceiling and poised to break out.
• A move above the August 20 high would likely confirm a bullish breakout.
• Such a move could see the pair reach 0.6400s.

NZD/USD is testing the ceiling of its sideways range. A break above the August 20 high would likely confirm an upside breakout with substantial gains on the horizon.

NZD/USD 4 Hour Chart

The pair temporarily breached the ceiling of its range on August 20 when it rose to a high of 0.6248, before quickly falling back and forming a gravestone Doji candlestick in the process. This was followed by only a brief period of weakness to 0.6109 on August 22 before the pair recovered and broke out of the range again on August 23.

Since then, NZD/USD has slightly pulled a break above the 0.6248 highs of August 20, a higher high would likely signal a decisive breakout. Such a breakout would activate the upside target, calculated as the 0.618 ratio of the range height extrapolated above. This gives an upside target of 0.6448 (bold rectangles). Another, more conservative target is at 0.6409 (December 2023 high).

Such a move would likely also change the short-term trend from sideways to bullish.

A break below the 0.6109 low, however, would reconfirm the sideways trend as intact and likely to extend, with a likely move down to the lows of the range in the 0.5850s.