The NZDUSD has slumped to the downside helped by a general weakness in commodities that are pushing NZD, AUD, and CAD to the downside.
Also helping the decline is the move below some key technical levels.
Looking at the NZDUSD hourly chart above, earlier in the day, the price was able to break back below its 100 hour moving average (blue line in the chart above).
The last time the NZDUSD had a closing hourly bar below its 100 hour moving average was back on March 16. On Friday near the end of day, the price did briefly move below that level but closed above the moving average line (blue line in the chart above).
In the Asian session today, the price waffled above and below the 100 hour moving average line but gave way in the early European session. One last test of the moving average found sellers against the level. That was the clue for buyers to turn to sellers. As a result the NZDUSD price pushed lower over the last seven trading hours.
In addition to the break of the 100 hour moving average, the move to the downside has also now seen the price break below its 200 hour moving average at 0.69129 (higher green line in the chart above). The last time the price traded below its 200 hour moving averages back on March 16. Bearish.
Finally, the price also fell back below its 200 day moving average (overlaid thinner green line) currently at 0.69076.Bearish.
The low price just reached 0.68872. That took the price briefly through the 38.2% retracement of the move to the upside from the March 15 low at 0.6888, but the price has rotated back to the upside and currently trades at 0.6895.
What next?
The range today is 76 pips. The average over the last 22 trading days has been 69 pips. So the average trading range has been reached and surpassed. With the 38.2% retracement holding support, there could be dip buyers against that level on the first test. However, a break below would have a traders would likely lead to more selling momentum with the traders next targeting the swing low from last week, and swing low from Friday, March 18 between 0.6862 and 0.68659. The 50% retracement of the move up from the March 15 low comes in at 0.68576 and is also near the swing low area
Risk now, will the be the 200 day moving average and 200 hour moving average between 0.69076 and 0.69134. Stay below, and the sellers can feel like they've tilted the bias more to the downside. Move above and sellers would be disappointed of the failed break.
