The NZDUSD fell below a old trendline yesterday near 0.6582 during yesterday's trade. That move also took the price below the swing lows going back to February 2022 near 0.6589 and 0.65918.
The subsequent momentum to the downside was continued today with the target being the January 28 low at 0.65290. The low price for the day reached that level and just below it at 0.65267. That took the NZDUSD price to the lowest level since September 24, 2020.
Breaking to a new 20 month low should lead to further selling momentum. That did NOT happen. As a result we are seeing a bounce back to the upside. The current price is trading at 0.6559.
Getting back above the old broken trendline at 0.6582 and the swing lows from January up to 0.65918 would give the buyers more comfort that the bottom is in place (at least for now).
There is more work to do to declare bottom, but having a double bottom (within two or so pips) has been good enough in the past to cause a technical rebound. Getting above the 0.6592 area would help increase that idea.
Drilling to the hourly chart, the 0.65804 to 0.65955 area is home to a number of swing lows and highs over the last few trading days. Getting above that level and then the falling 100 hour moving average at 0.6627 would give the buyers more comfort that the low is in place. The 38.2% retracement of the last trend move down is also a target above at 0.66359.
PS Helping the bias is potential risk on flows as a result of stronger stocks once again. The NASDAQ index held support near the March 2021 low at 12397.05. The low price reached 12430.90. The index is also trading back above its 38.2% retracement of the range since the post pandemic low at 12552.38. The price is currently trading at 12683.42 up 190 points or 1.51%.
