The top of the range is tested and the escape is attempted

• NZD/USD is repeatedly rising above the ceiling of a range that started in the spring.
• A break above the August 20 high would form a higher high and confirm a break from the range.
• Such a move is expected to result in a substantial growing following.

NZD/USD continues to hit the ceiling of the sideways range it has established since the spring. A break above the August 20 high would likely confirm a breakout to the upside, with substantial gains expected thereafter.

NZD/USD Daily 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 a bearish red candle, which would have been expected to indicate further weakness in the short term, however, the pair fell a few pips to 0.6109 on 22 August.

NZD/USD has since recovered and continues to test the ceiling of the range.

A break above the August 20 highs of 0.6248 would signal a decisive break out of the range. Such a move would then activate an upside target, calculated by taking the 0.618 ratio of the range height and extrapolating it higher. This would provide 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 (August 23 low), however, would reconfirm the sideways trend as intact. This would likely see the pair move back down towards the threshold of the range around 0.5850.