NZD/USD Technical Analysis | Forexlive
On the daily chart below, we can
see the big double
top with the
high at 0.6514 and the neckline at 0.6191. We can also see that the two tops of
the pattern are diverging with the MACD.
This generally makes a pattern
more reliable. The first breakout of the neckline at the end of February failed,
but the sellers leant on the red long period moving
average and piled in again to try another more decisive breakout. We got that
yesterday.
The catalyst was the Fed
Chair Powell testimony where he opened the door for a more aggressive
50bps hike and signalled that a higher terminal rate was needed. The USD
rallied hard immediately across the board. The sellers are comfortably in
control and probably only a miss in the NFP report can cause some USD weakness.
On the 4 hour chart below, we can
see that after the first failed breakout the price rallied towards the 0.6270 resistance where the buyers found strong
sellers as the ISM
Manufacturing PMI showed prices paid rising and, given the market
sensitivity to inflation, buyers folded as the market started to price a more
hawkish interest rates path.
What we got later is probably
just positioning into a possible hawkish Powell followed by the breakout as
Powell indeed sounded very hawkish. The price is now a bit overextended as we
can see by the distance from the blue short period moving average. Generally, we
can see some consolidation or a pullback before another push in the original
trend.
On the 1 hour chart below, we can
see that in case we get a pullback, the nearest and most probable resistance
for the buyers will be the 0.6133 level where we have also the confluence with the 38.2% Fibonacci
retracement level and the red long period moving average.
That’s the area where we are most likely going to see sellers piling in for
another push lower targeting new lower lows.