The NZDUSD was the strongest of the major currencies yesterday. That move to the upside saw the pair move into a fairly wide swing area between 0.6252 and 0.6272. The high price reached 0.62748 before rotating back to the downside in closing near the low end of that swing area.
Trading today found early sellers in the Asian session and that in March to the downside has continued.
Coming into the US session today, the price had found support against the 200 hour moving average (green smooth line in the chart above) and the stairstepped 100 day moving average (higher blue line in the chart above). Those moving averages are near converged at 0.6211 area.
The stronger labor data in the US moved a price lower and below the 0.6211 level. The price also moved closer to the next moving average target at its 100 hour moving average (smooth blue line in the chart above). That level comes in at 0.61903. The low price is reached 0.6197 so far.
Moving below the 100 hour moving average level would then target the 200 day moving average currently at 0.61775.
So overall, the NZDUSD has moved into a cluster of moving averages between 0.61775 and 0.6211, each of which could stall the fall as traders leaned against the risk defining levels. They can also accelerate the declines if all are broken.
When there is a number of key levels in an area, the risk focused traders tend to use the area to lean against level as risk can be defined and limited. So look for patient traders to pick their spots against the moving averages, and hope for a rebound back to the upside. Getting back above the 0.6211 level and staying above would be what they would be looking for. Of course if the moving averages are broken, all bets are off for a rebound. The bias turns increasingly more bearish on each break.
So the battle is on but key short term support is been tested.
