Over the past seven to eight trading days, the NZDUSD has been predominantly fluctuating within a defined "value area," ranging between 0.6112 and 0.6191. While there have been notable upward extensions on November 29, December 1, and December 4, and a recent downward extension, the bulk of trading activity has remained within this specified range. This consistent pattern within the value area suggests that a market movement away from this range could be imminent, and this is what traders are now anticipating, particularly considering the duration of this trading pattern.
Currently, the market seems to be leaning towards a downward bias. This is technically supported by the fact that the price has dropped below the key indicators of the 100 and 200-hour moving averages (blue and green lines in the chart below), which are currently at 0.6149 and 0.6156, respectively. The price remained below these averages during the European morning session, further inclining the bias to the downside. A critical move to watch for is a break below the lower boundary of the value area at 0.61128, and for the price to sustain below this level. Should this occur and the price further drops below the 200-day moving average at 0.6088, it would amplify the bearish sentiment, leading traders to target the 38.2% retracement level of the November uptrend, situated at 0.60499.
On the flip side, if the price rebounds above 0.6125 with momentum, it might reverse towards the 100/200-hour moving averages, positioned between 0.6149 and 0.6156. A breakthrough above these averages would shift the short-term bias to a more bullish outlook, prompting traders to consider the higher boundary of the value area at 0.6191 as a potential target. However, at this juncture, sellers appear to have more control, and the key question is whether they can maintain this momentum with a decisive move below 0.6112, or if the dip buyers will intervene, pushing the price upwards.