The Reserve Bank of New Zealand raise rates by 50 basis points yesterday and also raised the targets for the future path of rates going forward.
That action led to a sharp rise to the upside in the NZDUSD yesterday. The move took the pair above the high price from Monday' s trade at 0.64908. The price peaked at 0.65135.
Momentum faded, however, and the subsequent move back down cracked back below the Monday high and continued lower on the break higher disappointment.
The price fell below the closing level from the previous day, and continued down toward the rising 100 hour moving average (blue line). Early buyers against that moving average line pushed the price up into the close and back into positive territory for the day.
Today, after a run higher in the Asian session took the price back above the high from Monday (the price should've gone higher and at least retested the high price from Tuesday), sellers returned and pushed the price back toward the 100 hour moving average. Once again buyers leaned against the moving average level toward the end of the Asian session and pushed the NZDUSD back to the upside.
Yet another dip - this time in the early New York session - has once again found support buyers against the rising 100 hour moving average.
Overall, the price of the NZDUSD has tested that 100 moving average on 4 separate occasions over the last 2 trading days (within 5 basis points of that moving average line on dips - see blue numbered circles).
Needless to say, holding that support is good news for the buyers who keep on leaning against the rising moving average level and finding some upward reaction (with likely stops on a break below).
What is not so great is the failed break above the 0.64908 high price from Monday, and also the lower highs. In other words, the momentum to the upside is somewhat stunted.
As a result, buyers and sellers are battling it out with a move above 0.64908 and the high price today at 0.6199 the next upside targets along with the high price for the week at 0.65135. Get above all those levels and there should be further upside momentum on the break.
Conversely, breaking below the 100 hour moving average at 0.64522 would be a disappointment for the buyers and should lead to him him momentum to the downside with the low price from yesterday - and swing area- between 0.64129 at 0.64167 as the next major targets followed by the rising 200 hour moving average near 0.6398.
Can the buyers hold support and pushed higher? Or will the market traders be disappointed, and start to forget about the rate rise and expectations for higher rates? Watch the technical levels for clues.
