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NZD/USD Cracks Pennant Resistance and Signals Bullish Continuation

NZD/USD has been consolidating since making a new high on the year at 0.8793. You can even argue that there is a double top. However as price rallied from 0.8715, traders are more prone to see a breakout from a pennant pattern. 


(nzdusd 1h chart, 7/7)

The 1H chart shows the breakout which puts price above the pennant resistance trendline, and above the 200-, 100-, 50- hour simple moving averages. The RSI broke above 70. This reflects at least a neutral stance in the 1H chart, putting any bearish outlook on the shelf. If we confirm the breakout, there would be even greater bullish continuation implication from today's price action.

You can see from the daily chart that the pair has been bullish in June, and is trying to clear the March-May consolidation area. The technical condition in the daily chart provides wind behind the bullish breakout in the 1H chart. 


(nzdusd Daily chart, 7/7)

The daily RSI has some room to run before showing overbought condition (above 70). So there is no resistance from OB momentum point of view. A run-up toward 0.89 and the 0.90 level is possible.