The Reserve Bank of New Zealand raise rates by 50 basis points yesterday and the initial price reaction of the NZDUSD was uncommitted. The price of the pair moved both up and down after the rate decision.
Technically, there was initial resistance against its 100 hour moving average (blue line). On the subsequent moved to the downside, saw the low price stall ahead of the low from last week at 0.61929.
Later in the day, the price was able to extend back above the 100 hour moving average only to find resistance against the low of a higher swing area between 0.6252 and 0.6268.
Once again sellers pushed the price back to the downside and toward a lower swing area (ahead of the recent low extremes) between 0.6206 and 0.62105 (see green numbered circles in the chart above).
Up and down. Up and down.
In trading today, the price initially moved back to the upside in the Asian session, and once again found sellers near the low of the higher swing area near 0.6252. True to the pattern, the subsequent move to the downside stalled once again against the lower swing area between 0.6206 and 0.62105.
In short, there is a lot of ping-ponging going on as traders decide which currency is more worthy of the bias. Is it the NZD, in which case the NZDUSD breaks higher? Or is it the USD with the pair continuing what has been the trend lower in February?
Fundamentally, both central banks seem to be on the same path of continuing to tighten to slow inflation. Yet both central banks also have done a large amount already, and that has traders (and central bankers) feeling like the end is near.
That congruent thought process may be the reason for the up and down consolidation seen over the last five trading days.
At some point there will be more clarity. And when it happens, the technicals will help show the way with a break outside of the range.
For now, the topside swing area along with the falling 200 hour moving average and 38.2% retracement is the ceiling that would need to be broken to give the buyers more control.
On the downside, the swing lows near 0.61929 along with the higher swing area between 0.6205 and 0.62105 are the levels to get to and through to increase the bearish bias.
