The NZDUSD moved sharply lower yesterday on the back of the meltdown in the Asia-Pacific stock market. The move to the downside saw the price reach a new low for the year and 0.58488, but that was only by three pips before snapping back to the upside.
The run higher extended toward its falling 100 bar moving average on the four hour chart (currently at 0.5967.
In Asian trading today, the price did extend above the moving average level only to quickly reverse. The move lower stalled near the 200 hour moving average at 0.5918.
So support near 0.5918, and resistance near the following 100 bar moving average on 4-hour chart at 0.5967 is defining the trading range. Move outside of the range and the bias shifts in the direction of the break.
With stocks higher, it should benefit the pair, but there is work to do technically in the broader US stock indices to give buyers more control So there may be some reluctance until there is a clearer view.
This article was written by Greg Michalowski at www.forexlive.com.
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