Pair remains in 75 pip trading range
The NZDUSD broke below a lower pennant trend line in the Asian session which targeted the next key swing area in the 0.6994 to 0.70014 area. The pair tried to break below that area and get out of what has been a 75 pip trading range since April 1 (on the 8th day). The price could not get below and the price rebounded higher.
A test of the topside trend line, sent the price back down, but could not reach the lower swing area again.
The price rebounded back higher.
Honestly, the ups and downs made a mess of the pennant formation. There was a failed break below. There was a failed break above. The MAs are no help as the 100 and 200 hour MAs are converged at 0.7032 with price action above and below today.
What I did learn from the price action is:
- The lower extreme at 0.6994 to 0.7001 is strong. Buyers leaned despite the break of the lower trend line
- The pennant trend lines did very little. The market does not care (they will disappear)
My guess is the market is more concerned about the the 75 or so pip range. IN between, is noise as the buyers and sellers battle it out and await the next shove. The Red Box is more important now. Look for a break at some point. Hopefully it resolves the battle and we get more of a trend like move...
Trading is about taking clues from the price action (and fundamentals too) and relying on "the market" to gather heads of steam in the direction of the break. Sometimes "the market" is just not sure. That is what the NZDUSD is in now..
Logic says, that will not last forever. The pair will not trade in a 75 pip trading range forever. So traders might lean at the lows and highs, but look for those breaks where the price action trends more.