The NZDUSD has fallen 3.6% this week with the last 4 trading days down. This is the biggest drop since September 19, 2022.
This week, the RBNZ raised rates by 25 basis points, but the rise was seen as dovish as signals of a pause surprised the market. The pair moved to the lowest level since November 11, 2022 in today’s trading.
Technically, looking at the daily chart, yesterday’s downtrend fell below a swing zone between 0.60559 and 0.60844, but bounced back into the swing zone at the close.
Today, price extended above the high of this key swing zone, reaching a high of 0.60955. This should have given buyers some extra confidence, but sellers entered, buyers gave up and stronger US data sent the pair down to the new low at 0.6032. The current price is trading at 0.60437.
After that ?
The swing zone on the daily chart from 0.60559 to 0.60844 remains a risk zone (definition of bias as well). If the sellers are serious, staying below this level would keep them in check.
On the downside, today’s low price was within 8 pips of the 50% midpoint of the rise from the 2022 low to the 2023 high. This midpoint is located at 0 ,60242. Reaching and breaking above this level going forward (and staying below) would further tilt the sawtooth bias in favor of the sellers from a technical perspective, and open the door to further downside potential. Key target.
VIDEO to come soon.