The NZD is the strongest of the majors for the 3rd day in a row
The NZDUSD has moved higher on each trading day this week. The low was reached in the 1st hour bar of trading on Monday at 0.6912, and the high was reached today at 0.70945.
Yesterday, the price moved above the 200 day MA (currently at 0.70417) and the 200 hour MA (currently at 0.7037) and was able to stay above those levels on the NY afternoon dip yesterday. That technical move increased the bullish bias for today’s trade.
Today, the price has continued to chop higher, and in the process also moved more comfortably above the 38.2% retracement of the move down from the May 26 high. That retracement level cuts across at 0.7066 (it was tested on Wednesday and Thursday but could not sustain momentum). Getting and staying above that target is a further step in a more bullish direction, and gives the correction, and bullish move, a little more justification. Stay above will keep the buyers in play. Move below and there could be some weakening of the trend move this week.
On the topside, the next target area above comes between 0.7098 and 0.71035 (see red numbered circles in the 4-hour chart below). That area was a swing low area going all the way back to March. IN April the price move back above that a swing area and stayed above until earlier this month (see red numbered circles five and six on the 4hour chart below).
Today, the price tried to stretch toward that level but has fallen just short. Once again the high price reached 0.70945 today – short of the 0.7098 low swing target. Sellers may be leaning.
The aforementioned swing area above still remains a target to get to and through if the buyers are to continue the corrective move higher. The 50% at 0.71137 would become the next upside target on a break.
On the downside, sellers against the swing area would now want to see a price move back below the 38.2% retracement at 0.7066.
Given the five days in a row higher, it is not surprising to see sellers leaning against a key swing area (that goes back a ways). That may tip the bias a little more to the downside and/or give sellers something to lean against on moves higher into the weekend.