The NZDUSD has been on a downward path since the break above the 50% retracement of the move down from the February 2021 high at 0.69966 (call it 0.7000). That high price reached on April 5th extended to 0.7033, but reversed and closed lower on the day.
The subsequent break below the 200 day MA (green line) two days later at 0.6890 currently, and then the 100 day MA (blue line) after some ups and downs around that MA, gave the sellers more ammunition to take the pair lower on Friday.
The selling continued today with the price reaching a swing level near 0.6588 (see red numbered circles). That level was also an old downward sloping trend line (see blue numbered circles). The level at 0.6588 is above the extreme low from January 2022 at 0.6529. The low today reached 0.65812 before rebounding.
Often times a higher swing low is established after an extreme low is made (see red circles 2, 3 and 4) as traders decide the low is in place and early buyers lean ahead of the low. One higher low, leads to another and perhaps another. That is what formed at 0.6588, and is also where buyers lined up today on the revisit.
What now?
With the red circles lining up near 0.6581 to 0.6588, the level becomes a support level for dip buyers, and also a stop level if broken to the downside. For sellers looking for more downside, they want to see a break of the area, which should lead to a retest of the original extreme low at 0.6529.
Drilling to the 5 minute chart below, there is some dip buying attempts with the most recent dip showing more promise for additional corrective action. Looking at the chart below, the price today has seen ups and downs above and below the flattening 100/200 bar MAs (blue and green lines). The last hour or so, however, has seen a move back above the 100/200 bar MA lines along with the dips holding above the converged MAs at 0.66035. Bullish tilt.
The holding of those MA lines give dip buyers added confidence a low may be in place. Stay above and there should be additional corrective probing to the upside with the intraday highs at 0.6628 and 0.6633 as the next upside targets to get to and through. Doing so would help to increase the buyers confidence even more.
