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I haven't analyzed the NZD/USD pair for quite a long time. Today, the main focus will be on the technical factors that will help us predict the further price direction. Given that the previous month's session has been recently completed, I think we should start the analysis from the largest time frame.
Monthly chart
In February, the Kiwi advanced against the US dollar. However, some technical factors cast doubt on a further uptrend of the New Zealand dollar. First, we should pay attention to a long upper shadow of the candlestick formed in February. It may signal that the kiwi bulls have lost momentum. Secondly, NZD/USD closed the previous monthly session within the Ichimoku Cloud. The price could have broken above it, but failed to do so. In addition, there is a strong psychologically important technical level of 0.7500, which the bulls failed to break through. The quote simply did not reach this key mark.
The above mentioned technical details reduce the possibility of a further uptrend for the pair. At the moment, this scenario has been confirmed. Since the beginning of March, the New Zealand dollar has been depreciating against the US currency. If we consider the prospects for March, buyers will have a challenging task here. First, they need to break through the strong resistance at 0.7460 and then close the monthly session above the key level of 0.7500. In the current situation, when the US dollar is winning back its previous losses, the bullish prospects look very weak. As for the bears, they will need to return the price back to the Ichimoku indicator cloud and hold it there by the end of the month. Judging by the last two monthly candlesticks, we can say that NZD/USD has finished its uptrend and has reversed to the downside.
Weekly chart
On this time frame, the bearish outlook is confirmed by the formation of a Shooting Star candlestick pattern which has a very long upper shadow. This candlestick pattern is a reversal model that is usually confirmed by the market. In case the bearish pressure continues, the pair may fall to the important psychological level of 0.7000 and then test the blue Kijun line of the Ichimoku indicator found at 0.6985. In my opinion, a true breakout of the 0.7000 level and the Kijun line will finally indicate that the bulls have lost control of the pair. This will open the way for bears to test new lows. However, today is March 5, and a lot can change by the end of the month. At the moment, I think that the main trading tip for NZD/USD is to go short. It is a good idea to open short positions after the price completes a correctional pullback to the area of 0.7200-0.7230. The pair has already moved significantly lower, so it is better to wait for a correction to sell the pair. I think it is too risky to trade short from the current minimum values. It is better to wait with opening long deals for now until a corresponding signal appears on a daily or a weekly chart.
Good luck!
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