NZDUSD trades near high level
The RBNZ is expected to leave the official cash rate at 1.75% in the new trading day. The last change was back on November 2016.
The last decision was on February 13th. At the time the NZDUSD was just above the 100 day MA at 0.6720 area. The statement and Orr press conference was "less dovish" and the pair rallied up to 0.6850, before retracing part of the gain.
Since that day, the price action has seen ups and downs. The high was reached last week at 0.69379. The low was earlier this month at 0.6744. That low was against the 200 day MA. We currently trade at 0.6913 area - just about 25 pips from the recent high (not traded below the 200 day MA since the last meeting - currently at 0.67343). PS the 50% midpoint of the move down from the April 2018 high is at 0.69095. We are right near that midpoint level.
On a more bullish/less dovish report, the recent highs are not that far away.
- 0.6938. High for March
- 0.6941. High from February 1 and high for 2019
- 0.69686. High from December 4, 2018. That is the highest level going back to June 15, 2018
Above that high, the 0.7024 is the 61.8% of the move down from the April 2018 swing high). Then there are highs from June 2018 at 0.7058 level.
On the downside, looking at the hourly chart below, the 100 hour MA is trailing at the 0.68935 currently and moving higher. A break below would be tilt the bias more to the downside. Yesterday, the pair based near that level and ran higher. On Friday and Thursday of last week, the price fell below brief moments but could not sustain selling momentum.
A break with momentum would shift the focas and bias lower.
After that, the next targets would be a
- trend line at 0.6876 and the
- 200 hour MA at 0.6870. That should give sellers the upper hand,
- The 50% of the move up from the March low at 0.6841 would be the next possible target.
- The 100 day MA is down at 0.6805.
If the shift in tone is more dovish, traders may look to push for a retest of that key 100 day MA. After all, the price action since the last meeting has been more up and down and we are now near the up.
With the price nearer the high going back to December 2018, the buyers are thinking the RBNZ is not going to be too dovish. However, if you take the view the pair is in the ups and downs, a move lower is not out of the question.
So take the clue from the technical tools. If the price dips below the 100 hour MA, it might be a time to eye selling for hopes of a retracement lower.
Conversely, if the 2019 high is taken out at 0.6941, you gotta think the December high is also doable. Then we will be at the highest level going back to June 2018.
Listen to the market.