NZD/USD Technical Analysis | Forexlive
On the daily chart below, we can
see that the price has rallied above the broken neckline again. The movement
was strong and quick because of the recent events and the repricing of interest
rates expectations.
Last week, besides a higher
unemployment rate and lower than expected wage gains in the NFP
report, we saw the failure of the Silicon
Valley Bank which spread fears of contagion and another
banking crisis.
Given such developments, the
market repriced lower interest rates expectations with rate cuts by the end of
the year and at some point, there was even more probability of no hike at the
March meeting.
This quick repricing pushed the
USD lower across the board. The moving
averages are also on the brink of crossing higher which would be a bad omen for
the sellers.
On the 4 hour chart below, we can
see that the price has come into a strong resistance at 0.6270 with the 38.2% Fibonacci
retracement level of the entire move down since February. This
is where the sellers will most likely lean on. Yesterday the US
CPI report
showed that inflation is still too high, but the data was in line with
expectations across the board and therefore the market didn’t react in a big
way.
The moving averages will act as
support for the buyers with the last line of defence being the 0.6191 level
where we have the confluence of the red long period moving
average and the support level.
On the 1 hour chart below, we can
see that there’s a possible double
top at the
38.2% Fibonacci retracement level and the resistance at 0.6270. The divergence between the price and the MACD is also signalling a loss of
buying momentum which should give the double top more chances of playing out.
The neckline would be the support
at 0.6191 that we highlighted above as the last line of defence for the buyers.
If the sellers manage to break that level, then we should see them again in
control and get another selloff towards the 0.61 handle or lower.