In no hurry to tighten...

The NZDUSD tumbled to the lowest level since June 6th 2016. The price took out the lows from last week at 0.6838 and the low from the end of April at 0.6847. The December low was 0.6861. The fall took the price from a high of 0.6938 to 0.6822.

When you get a sharp move lower like we did, I like to set the the corrective resistance at the 38.2%-50% of the move down from trend move lower. That area comes in at 0.6866-80 (yellow area in the chart below).

Stay below that area and the seller remain in control. In addition, traders who missed the sell off and want to get in, should like to sell at 38.2-50% of the move lower. Move above and traders who sold at the lows of the extreme (and quick move), get nervous. It may not spell the end of the world for bears, but it muddies the water and could lead to a snap move back higher as shorts exit and cover up.

Looking at the weekly chart, the price is below the 100 week MA at 0.6877 level (close to the 0.6880 level -50% level). The 50% of the move up from the 2015 low comes in at 0.6805. That is the next major target for the pair. If the price goes below that level there should be more selling.