NZD/USD is testing a break of the 100-hour MA for the third time this week
It’s just not happening so far for NZD/USD buyers. The kiwi may be the only currency that is outperforming the dollar so far this week but there hasn’t been any key technical breaks to be observed just yet.
The pair may be climbing today on the back of dollar weakness and slightly better risk tones in equities but it doesn’t look like the rally here has legs until buyers can hold a break above the 100-hour MA (red line) to reclaim the near-term bullish bias, and then work towards a break of the 0.6800 handle.
Looking at the daily chart, there’s still good reason to believe that buyers can sustain the momentum to the upside as long as price sits above the 100-day MA (red line). However, failure to get above the 38.2 retracement level @ 0.6796 will be a worrying sign for the time being and that will be the key level to look out for.
In my view, if price fails to hold above the 100-hour MA and then threatens a break of the 200-hour MA – where near-term bias will turn more bearish, it’s going to be a painful drop back towards the year’s lows as monetary policy divergence continues to fuel the macro picture of the pair; while at the same time, we have had some shorts flushed out over the past two weeks.