The NZDUSD moved sharply higher after the tamer than expected US CPI data sent the USD lower.
That moved to the upside took the price above a cluster of moving averages including:
- 200-hour movie area to 0.61024
- 100-bar moving out on the four hour chart at 0.61059
- 100-hour moving out in 0.61136, and even the
- 200-bar moving average on the four hour chart at 0.6127
The high price extended to 0.6130
That high reversed all of the declines seen after the “dovish” hold on rate from the RBNZ after their rate decision yesterday.
However, since peaking the price as rotated back to the downside and moved back below all the above moving averages with the exception of the 200-hour MA. The low corrective price reached 0.61028 which was just above the 200-hour moving average at 0.61024.
The price is currently trading at 0.61105.
What now?
The CPI has the market leaning to lower rates, but the RBNZ is thinking that way as well.
So the price action, makes sense with buyers turning back to sellers with the decline moving back toward the middle of the 2-day range. That level comes in just below 0.6100 (and joined by the 200 hour MA).
Going forward, I would not be surprised if the price action maintain its up-and-down trading bias.
As a result,
- On the topside watch the 200 bar MA on the 4-hour chart at 0.6127 as resistance.
- On the downside, watch the 100 day MA (which stalled the fall yesterday) at 0.6066.
- In between the 0.6100 area where the 200-hour MA and the 50% of the 2-day range will be a intermediate bias defining level.
I am expecting a chop as traders take a breathe and looks for more fundamental direction to push the price outside the aforementioned range.
This article was written by Greg Michalowski at www.forexlive.com.
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