The NZDUSD is lower, retreating to a low of 0.5939 after failing to sustain a break above the key 0.6000 resistance level and the highs from April and early May between 0.6018 and 0.60281. The high price yesterday stretched to a high of 0.6030 but stalled. Buyers turned to sellers (eventually).
Today, the pullback has been driven by improved global risk sentiment and renewed strength in the USD. The US stocks are up sharply with the S&P index up near 2.0% and the NASDAQ index up 2.4%. Fundamentally, stronger-than-expected U.S. Consumer Confidence (98 vs. 85.7 prior) has helped to support the US dollar.
In the new trading day, the market will focus on the RBNZ rate decision.
RBNZ Rate Decision (Wednesday 02:00 GMT):The expectations are for a 25 bps cut to 3.25%. The decision is largely expected and priced in. However, the Monetary Policy Statement could and commentary can always push the price action
Technically, the rotation lower today has pushed the price near the middle of what has been an up-and-down trading range mostly between 0.5845 and 0.6028. The midpoint of that range is at 0.5936. The current price is trading at 0.5946.
The low price today reached 0.59391 just above the midpoint level. Also, a cluster of moving averages defined by the 200-hour moving average, the 100 and 200-bar moving averages on the 4 hour chart all come in at 0.5933.
That area will be the key barometer for both buyers and sellers. Stay above and move above the higher 100-hour moving average at 0.59574, and then the swing level at 0.5967 would tilt the bias more to the upside. Conversely, moving below the cluster moving averages would open the door for further selling.
This article was written by Greg Michalowski at www.forexlive.com. Read More Details
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