NZDUSD sees "risk off" today, but also finds support. A target for sellers now.
The 0.6421-24 is home to a number of recent lowsThe NZDUSD raced lower on August 7th on the back of the RBNZ surprising with a 50 BP cut. The low reached 0.63768, but then bounced and started to build a support at a higher 0.6422-24 area.
That area was tested yesterday and the price bounced. Today on the "risk off" flows, the area was tested again and has seen a modest bounce.
So although stocks continue to get creamed (Nasdaq down -2.41% and Dow down -600 points) the NZDUSD is off that low interim floor (I guess it is the 2nd floor above the lower 0.63768 level).
Sellers are more in control, but what traders know, is if that floor needs to be broken. If done, it should lead to more selling pressure.
What is the risk now?
Drilling to the five minute chart below, the correction off the low stalled just ahead of the 50% of the trend move down. That comes at 0.64449. Also, that area is home to swing lows from earlier in the day. Call it a floor that was broken. The floor became a ceiling on the corrective move higher.
So stay below the 0.6445 level, and the bears are still in firm control.