Yesterday's post laid out what was needed to get out the NZDUSD chop
In a post yesterday (CLICK HERE), I laid out the reasons why the 0.71747 to 0.7177 was support and 0.7224 to 0.72252 was resistance for the pair (see green numbered circles and red numbered circles in the chart above). At the time the pair was trading between those levels.
I ended the post by saying:
The price currently trades between the levels. So it is still more of a coin flip for the pair. However, if an extreme is approached (either one), look for traders to lean against the area, until there is a break. Hopefully, the next break will lead to more of a momentum move that gets the pair outside of this dreaded chop.
Today, in the early Asian session, there was one last test of the upper extreme and traders leaned. However, after a correction toward the 38.2% retracement near the 0.72055 level, the price based, rose and broke above the aforementioned 0.72252 level.
As hoped, the break did find momentum and that ended up sending the pair outside of the "dreaded chop" range that has confined the pair since January 8th.
What next?
Most of the chop seen in the chop above (and which I referenced) occurred between January 8 and today. What was not seen, was that the January 5th high price extended up to 0.73148 (see chart below). The high price today reached 0.73139 - less than a pip from that level.
So although the price today, did do as I had hoped, but it also - technically - remains within the longer term "dreaded chop". It will take a move above the 0.73148 to get out of that chop range.
Nevertheless, with the break above all the levels today, traders will look toward the 0.72676 level as support /risk defining level now. Stay above is more bullish. The current price trades at 0.7289.
