The NZDUSD moved lower yesterday helped by the decline in US stocks.
The decline came a day after breaking above the 200 hour moving average for the 1st time since May 5. The last 3 times the price moved above the 200 hour moving average (it moved above back on April 20 and April 21 as well), momentum could not be sustained and the price rotated back to the downside.
Traders were wary of another failure.
Indeed the price did move below both the 200 and 100 hour moving averages near the close from yesterday's trade and into the Asian session. However a lower swing area between 0.6272 and 0.6283, stalled the fall near the top of that extreme. The price move back above the moving averages, and a final test in the early European session found support buyers against the MA levels today.
That give the buyers the go ahead 2 push higher and the move to the upside extended above swing highs near 0.6378 and above a swing area between 0.6392 and 0.64105.
There has been some apprehension above the final swing area. The price has corrected lower off of the high that reached 0.64164. Traders will now watch the 0.6378 area for close support.
If the NZDUSD is building a corrective rally after the sharp selloff seen of late, holding that level would be the best case scenario for the buyers. It represented swing highs from May 9, May 11, and May 17.
The buyers are making a play to the upside. The sellers meanwhile are trying to keep the corrective rally under wraps.
Watch the 0.6378 level for close support and clues as to the buyers strength. Get above 0.64105 and traders will next target 0.64522 swing highs from May 6.