On the daily chart below, we can see that the sellers couldn’t keep the momentum going breaking out of the 0.6191 support. As the fears caused by the failure of the Silicon Valley Bank and a possible banking crisis reached their peak, the buyers stepped in as emergency actions taken by the Fed and the incredibly fast repricing in interest rates expectations weighed on the US Dollar.
The strong buying momentum has made the moving averages to cross upwards, which may be a bad omen for the sellers. All eyes now are on the FOMC decision today where the Fed is expected to hike by 25 bps.
NZD/USD Technical Analysis
On the 4 hour chart below, we can see that there may be a possible inverted head and shoulders pattern. The neckline would be the resistance at 0.6270 and the buyers will need to break above it to gain conviction and extend the rally towards the next resistance at 0.6389.
Right now, the price action is a bit choppy as we’ve been basically ranging since the end of February. The market needs a clear fundamental catalyst to find the direction at this point.
On the 1 hour chart below, we can see that there’s not much to lean onto. The moving averages have crossed recently to the upside signalling more buying momentum. There’s a minor resistance level at 0.6230 which the buyers will need to break to target the neckline at 0.6270.
The sellers may want to wait until the price reaches the neckline or until the moving averages switch back to the downside. In the end, it will all hang on the FOMC today and a hawkish outcome would give a better catalyst for the sellers, while the buyers may want a dovish decision.
