The correction higher has stalled ahead of the close from yesterday.
The NZDUSD tumbled on the RBNZ OCR 0.25% basis point cut. The price tumbled to the 0.6520 area and bounced. The fall lower took the price below swing levels going back to the end of October, January 2019 and April 2019 in the 0.6972-795 area (see yellow area and red numbered circles). That should have been a ceiling after the break. That was not to be. The price is back above that area. It is now support again…
Drilling to the hourly chart, the correction has found a limit. The price high has reached 0.65977. The close from yesterday came in at around 0.6600. So the market is reluctant to take the pair positive (or so it seems).
You would think that the pair would remain offered on the rate cut, but a US/China deal could help to support the pair on “risk on” flows (and hopes for more growth from China going forward).
As a result, shorts still have to protect and buyers may also feel they have a case for more of a correction after the failed break lower.
On the topside, a move into positive territory would next target the 100 hour MA (blue line) at 0.66094. Get above it, and the technical picture looks more bright (with more work to do though with trend line and 200 hour MA as other hurdles).
On the downside, getting below the 0.6572-795 area (swing area from the daily) would tilt more of the bias back to the downside.
The battle lines are in place. The market awaits.