It pulls back to support, but the trend remains bullish

• NZD/USD has pulled back to support but remains in an uptrend that is likely to resume.
• The breakout from Thursday’s range gave a bullish signal and suggests substantial gains.

NZD/USD pulls back to support in the 0.6250s after making a higher high. The correction is consistent with the relative strength index coming out of overbought, which gave a sell signal.

The short-term trend is bullish, however, and given that “the trend is your friend,” the odds favor a recovery and extension to higher highs.

Thursday’s break above the August 20 high confirmed a breakout and indicated likely substantial gains on the horizon.

NZD/USD 4 Hour Chart

The next target is at 0.6409, the December 2023 high. This is a conservative target for the pair – a break from the range triggers an upside target that is higher at 0.6448, calculated by taking the 0.618 ratio of the range height and extrapolating it above.