The NZDUSD is trading to a new low for the year but only by the smallest of margins so far. The low took out the low from yesterday by about a pip at 0.59749 vs 0.59754 yesterday. The price has bounced to 0.5982 currently, but remains vulnerable to the downside as the broader S&P and Nasdaq trade lower for the day (down -0.63% and -1.09% respectively). They are off lows but still have downside vulnerabiities.
Looking at the hourly chart of the NZDUSD above, the pair moved sharply lower on Tuesday on the back of the stronger than expected CPI data. Yesterday the price waffled up and down in nondirectional trading as the declines consolidated near the lows. Nevertheless a new low was made for the year.
In trading today, the initial price action was to the upside, but after stalling near the high price from yesterday, the price has rotated back to the downside falling back below the swing low from September 7, and as mentioned, taking out the low from yesterday by less than 1 pip.
Also contributing to the bearish technical bias is that the high price from yesterday and today stalled ahead of the swing low price from September 8 at 0.60297.
Going forward getting back above the natural support/resistance level at 0.6000 would be needed to try to take the pair out of the bearish hole (it would also take the price back above the September 7 low). That is the minimum. There would be more work to do on the upside including getting above the highs from yesterday and today and also above the swing lows from September 8 at 0.60297. However, moving back above those targets would give the dip buyers against the low from yesterday some breathing room. Absent that - and on a move to new lows - and the sellers remain in firm control.
Watch the 0.6000 level above...
Taking a look at the weekly chart, the pair is trading at the lowest level since the week of May 17. The next downside target comes at swing lows from the April 19 week, and the lows from the weeks of May 10 and May 17, 2020. Those lows come between 0.59089 and 0.59218. A downward sloping trendline on the weekly chart also cross within that swing area.Move below adds to the bearish bias and would further increase the bearish bias from a technical perspective.