The dip stalled at the 61.8% retracement level
The NZDUSD has seen the price move and now back up. The current price is now higher on the day by about 8 pips at 0.7070.
The move higher earlier in the session came after the higher-than-expected inflation for the quarter which came in at 2.2% versus 1.5% estimate. That run higher saw the price spike above the key 200 day MA at 0.70975 to a high at 0.7104, but the momentum quickly faded and buyers turned to sellers (despite the expectations that the RBNZ would be forced to tighten quicker).
In addition to the technical fail, weaker China numbers may have also contributed to the decline.
The move lower saw the price dip below swing areas near 0.7075 and 0.7056 but found support buyers near the broken 61.8% at 0.7050. The bounce has taken the price to a US session high at 0.7082 but is back down at 0.7070. The price is near the midpoint of the day.
The rebound in US stocks seems to be helping the rebound. The Dow is now back to unchanged. The S&P is up 0.21% and the Nasdaq is up 0.30%.
US yields remain mostly higher but near the middle of the ranges for the respective tenors. The 5 year yield is up 4.5 basis points at 1.667% but off the high at 1.193% and above the 1.137% low as well.
The choppy price action has intraday traders battling. What we know is the 200 day MA break gave the buyers their shot. They missed. We also know the broken 61.8% of the run lower held support. Those technical levels are the upper and lower boundaries going forward at 0.70975 above and 0.7050 below.
WIth the price between the two levels, I would give the bias to the buyers, but with a caveat that the 200 day MA failure does give the sellers some hope. Nevertheless, it would still take a move below the 61.8% to show more downside potential.
