Move higher stalled at ceiling area after breaking triple top
The NZDUSD got going higher earlier today and just kept marching higher. It was the biggest mover on the day. The strongest currency of the majors today.
I don't know the catalyst of the move, but the price marched higher and technical levels were taken out along the way.
One such area was the 0.7343-46 area. This area represented at triple top from the end of June and the beginning of July. That area was tested (the high got to 0.73419), then broken and the price shot up to the next key area defined by swing highs on the daily chart between 0.7362-79 (see daily chart below).
There have been 4 other swing levels since August 2016 in that area. In September 2016 there was a 3 day break above. In November 2016 there was a one day break above (one close). In February 2017 (the high for the year so far), the price stalled in the area at 0.7373 (red circle 4). Today the high stalled at 0.7367 on the final run higher today - just short of the 2017 calendar year high (red circle 5).
On the hourly chart, the pairs 38.2% retracement level of the move up from the July 11th low, comes in at 0.73039. The low corrective price has reached 0.7307 so far. Support holding? We can assume that traders are leaning. A break below should solicit more selling.
Drilling to the 5 minute chart, the 50% retracement of the day's trading range comes in at 0.7306.
So with the 38.2% on the hourly chart at 0.73039, and the 50% of the day's range at the same area at 0.7306 (not to mention the 0.7300 natural level), that area is an intra-day support area. Get below and the sellers are taking more control. For now though, the low is a potential bottom.
What might keep the correction going lower (or turn the momentum more to the downside)?
Also looking at the 5-minute chart, the 100 bar MA (blue line in the chart below) comes in at 0.7319. The price has broken below that MA line and is now retesting it. Can the price remain below right now? If so, look for a break of the 0.73039-07 area. IF, on the other hand, the price moves back above the 100 bar MA, the correction from the top, looks more like a correction from the top. We should move back higher.
Key time right here for the pair.
Do you believe the "random-ish" move? Do you think it was liquidity driven? The price action does not lie, but adding technical levels puts the story more in perspective Resistance was pushed off the daily chart. The intraday support is now being tested. The price action from here should complete the story line.