The NZDUSD traded to a new low for 2022 reaching 0.59282 so far. The low price from Friday reached 0.59391.
The move to the downside takes the price within shouting distance of the swing lows from the weekly chart going back to April and May 2020. Those lows during those weeks reached 0.5909 up to 0.5922 (see weekly chart above). Moving below those levels - and staying below - is needed to open the door for further selling control. A downward sloping trendline on the weekly chart also comes in at just below that level near 0.5900 increasing the support in the 0.5900 to 0.5922 area.
When a number of levels line up in a relatively narrow trading range, countertrend traders will look to lean against those levels as risk can be defined and limited. In addition trend following profit-taking traders may also lean as well.
Putting it another way, traders who buy and lean against the area, could sell on a break of the level and reestablish/establish the trend following position with little risk. Conversely, if the price does bottom, those buyers could play the rebound back in the opposite direction.
So what would dip buyers look for on a rebound against the key support?
Looking at the hourly chart, if the buyers are able to get the price back above 0.59391 (the low from Friday), that would be the minimum upside level to get to and through. The Wednesday low at 0.5975 would be the next target followed by the falling 100 hour moving average at 0.59865. Ultimately getting above the 100 hour moving average would be a minimum target level if the buyers are to start to exert more control. Absent that and the sellers still remain in the drivers seat.
So keep those price dynamics in mind for traders today. There is good support down to the 0.5900 level for a trade, but if the buyers are to show that they can take back more control, they have a bunch of work to do starting with getting back above 0.5939 and progressing to 0.5975 and the 100 hour MA at 0.59865.