NZDUSD Technical Analysis | Forexlive
On the daily chart below, we can
see that the NZDUSD has recently broke below the March low as the RBNZ
went on pause and the US economic data made the market to expect
more hikes from the Fed. This has caused a divergence in monetary policy
expectations and made the NZD one of the worst performers among the majors.
We can also notice that the fast
selloff last week has made the NZDUSD a bit overstretched as depicted by the
price distance from the blue 8 moving
average. In such instances, we can often see some consolidations or pullbacks
so that the price converges with the moving average in a new equilibrium.
On the 4 hour chart below, we can
see that the price is now in fact consolidating just beneath the broken support
that now may turn into resistance. If we get a deeper pullback,
the sellers should be waiting near that 38.2% Fibonacci
retracement level to target a break below the new low.
The buyers, on the other hand, do
not have much to lean on here as there’s a big vacuum before the next support at 0.57. What the buyers can
look for is misses in the US data this week, especially in the NFP report on Friday.
On the 1 hour chart below, we can
see that NZDUSD is diverging with the MACD, which is generally a signal of
weakening momentum often followed by pullbacks or reversals. If the price
breaks above the last lower high at 0.6060, then we should see NZDUSD rallying
back to the 0.61 handle. The sellers are likely to be waiting in that zone with
a defined risk above the 38.2% Fibonacci level.