On the daily NZDUSD chart below, we can see that the price today has spiked to the resistance at 0.6389. This was caused by the RBNZ which decided for a surprising 50 bps hike instead of the expected 25 bps. This sent the kiwi higher across the board and we may now see some consolidation or pullback before the next move.
In fact, as we can see from the distance between the price and the blue short period moving average, the move has overextended. The focus now will switch to today’s US ISM Services PMI and we may see the USD back in charge if we get a big miss in the data and the market switches to the recession trade.
NZDUSD technical analysis
On the 4 hour chart below, we can see that if we get a pullback, the best place for the buyers would be the resistance turned support at 0.6270 where we have also confluence with the 61.8% Fibonacci retracement level. The sellers may want to wait for the market to clearly switch to a more bear structure with the price first breaking below the 0.6270 support and the trendline. This will give them more conviction and control.
On the 1 hour chart below, we can see that at the moment the price is indeed pulling back. If the buyers are aggressive enough, we may see them leaning on the minor trendline and the 38.2% Fibonacci retracement level and target again the resistance and the breakout. Aggressive sellers, on the other hand, may pile in on the break below the trendline to target first the support at 0.6270 and then the major trendline.
