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NZDUSD Dips Below Midpoint 50% Retracement of Rise From 2020 Low, But Rebounds


NZDUSD drops to test 50% midpoint

the NZDUSD

USD/USD

NZD/USD is a commonly offered currency pair representing the New Zealand Dollar or Kiwi and US Dollar. The pair is popular for exposure to a commodity currency, namely the NZD, which helps capture traders’ risk appetite. Like its Antipodean counterpart, the Australian dollar, NZD/USD is seen as carry, in part due to interest rate differentials favoring the NZD. The NZD is the seventh most liquid pair in the world at the time of writing, with the USD being the most traded currency in the world and the NZD being the tenth. What affects NZD/USD? NZD/USD is offered at virtually all retail forex brokerages and is a common pair that traders may have experience with. The pair moves based on investor sentiment and can be much more volatile than other pairs such as EUR/USD, GBP/USD and others. Given that New Zealand is the world’s largest exporter of powdered milk, this metric is a key factor when driving the pair. Any sensitivity to milk powder exports is captured via the NZD/USD. Additionally, tourism is a key contributor to the New Zealand economy and as such helps move the currency pair. Other factors of note for NZD/USD include export volumes to China as well as other important economic data releases from China. Central banks also play a huge role in the direction of the currency pair, with the US Federal Reserve and the Reserve Bank of New Zealand being closely watched by investors. Monetary policy is more than capable of sharply moving NZD/USD, which can swing much more than other normal pairs.

NZD/USD is a commonly offered currency pair representing the New Zealand Dollar or Kiwi and US Dollar. The pair is popular for exposure to a commodity currency, namely the NZD, which helps capture traders’ risk appetite. Like its Antipodean counterpart, the Australian dollar, NZD/USD is seen as carry, in part due to interest rate differentials favoring the NZD. The NZD is the seventh most liquid pair in the world at the time of writing, with the USD being the most traded currency in the world and the NZD being the tenth. What affects NZD/USD? NZD/USD is offered at virtually all retail forex brokerages and is a common pair that traders may have experience with. The pair moves based on investor sentiment and can be much more volatile than other pairs such as EUR/USD, GBP/USD and others. Given that New Zealand is the world’s largest exporter of powdered milk, this metric is a key factor when driving the pair. Any sensitivity to milk powder exports is captured via the NZD/USD. Additionally, tourism is a key contributor to the New Zealand economy and as such helps move the currency pair. Other factors of note for NZD/USD include export volumes to China as well as other important economic data releases from China. Central banks also play a huge role in the direction of the currency pair, with the US Federal Reserve and the Reserve Bank of New Zealand being closely watched by investors. Monetary policy is more than capable of sharply moving NZD/USD, which can swing much more than other normal pairs.
Read this term hit a new low for the day at 0.64511. This took the pair to the lowest level since July 2020. It also broke below a swing zone between 0.6488 and 0.6529 (see the yellow zone in the chart above), and the midpoint of 50 % upside from 2020 low at 0.64655.

The current price is trading at 0.6469, just above this middle level on a bounce higher from the lows.

Recall from yesterday, the low price has supplanted the low price from the beginning of this year (from February), but only by a few pips (see yesterday’s post here).

This low came in at 0.65267. The rebound high price took NZDUSD to 0.6563.

Looking at the 5 minute chart below, this corrective high price yesterday afternoon saw the pair retest its moving averages of the 100/200 bar (blue and green lines). Sellers supported against these levels and pushed lower in today’s Asian session, hitting 0.64707 – just above the 50% midpoint at 0.64655.

The price climbed higher from that 50% level (see the 5 minute chart below) and in the process even extended above the 100 and 200 bar moving averages and the low of ‘yesterday. However, the momentum could not be sustained and we have since seen the downward rotation towards new session lows.

The current 100-bar moving average sits at 0.64897. The moving average at 200 bars is at 0.65031. Breaking through both of these levels – and staying above them – is necessary to give buyers hope that the 50% test was good enough for the time being. Without it, and the sellers retain control.

NZDUSD Dips Below Midpoint 50% Retracement of Rise From 2020 Low, But Rebounds

NZDUSD trading above and below the 50% midpoint

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