The RBNZ meets later this week (on Wednesday at 5:00 PM ET/9PM GMT). No change is expected from economists. For what it is worth, Citibank said today the rate would stay at 3.5% until 1Q.
Technically, the bias is negative (the price found sellers against the 200 hour MA on Thursday and Friday – see green line in the chart below). However, the price did approach and hold against the 50% retracement of move up from 2013 low at the 0.82584 level (I respect the first test of the 50% and the market did what it was supposed to do today – well done). It also held against a bottom trend line on the hourly chart at the same level (see chart below). Good support and support held like a charm.
Now what?
Well the sellers and buyers now have a battle going on.
For the buyers, the 50% is the risk defining level to lean against – stay above and the price can correct higher. Move below and stop the position out.
For the sellers (who have been in control), I will look toward the 38.2%-50% retracement and the 100 hour MA (blue line in the chart below). Stay below and the buyers are really not doing much. Move above, and I cannot rule out a test of the 200 hour MA once again. The 200 hour MA has been tested twice, why not three times before the RBNZ statement?
With RBNZ ahead, I get the feeling the low may be in place, but I can also get the feeling the high may be contained as well.
NZDUSD on the hourly chart also found support against bottom trend line. There is resistance against the retracement and 100 hour MA though.
