NZDUSD Technical Analysis | Forexlive
On the daily chart below, we can
see that the NZDUSD couldn’t break the 0.6389 resistance and sold off as US economic data
started to come in better than expected. The market has been pretty confident
that the Fed would pause at the June meeting, but the Fed left a door open for
another hike if the data indicated such a move. In fact, strong economic
reports made the market to slowly come to the idea that the Fed may not be done
yet.
Yesterday, we got again good US
PMIs where the manufacturing part contracted more than expected but the
services one exploded to the upside. It’s worth remembering that today’s
economy is 80% services oriented, and that may keep core inflation higher for
longer. On the other hand, the RBNZ
today hiked by 25 bps as expected and signalled a pause which sent the
NZD/USD lower.
On the 4 hour chart below, we can
see that after the first big selloff following the upward trendline breakout, the NZD/USD pulled
back markedly into the 61.8% Fibonacci
retracement level at the 0.63 handle. After a double
top, the
price started to roll over and eventually cratered as the RBNZ signalled a
pause today. The target on the downside should be the low at 0.6084, but we
might see a pullback first after such a strong move lower.
On the 1 hour chart below, we can
see how the price broke below the neckline of the double top, retested it and
then moved lower into the RBNZ rate decision. The NZD/USD broke below the
previous swing low at 0.6181 but the selling momentum seems to be waning.
From a risk management perspective,
the sellers should wait for a pullback into the 0.6181 level to have a better
risk to reward setup. The buyers, on the other hand, should wait for a break
above the swing low at 0.62 to have more conviction on a move towards the 0.63
handle.