The NZDUSD initially surged after the RBNZ delivered a 25-basis-point
rate hike, but the bullish reaction proved short-lived. As broad-based U.S.
dollar buying accelerated alongside a selloff in equities, the pair reversed
lower. That decline, however, found willing buyers near the 200-hour moving
average, setting the stage for a sharp rebound.
Today’s rally has gained momentum, helped by improving risk
sentiment, stronger equity markets, and an increasingly bullish technical
backdrop.
On the hourly chart, the pair has broken above an important
swing area between 0.5719 and 0.5726. That zone has acted as resistance
on multiple occasions dating back to April, and again during June and July,
making today’s breakout technically significant. The move higher extended to 0.5762,
leaving the pair just 3 pips below the 38.2% retracement of the decline
from the June high at 0.57658.
That retracement level is reinforced by the June 11 swing
low at 0.5768, creating a key resistance zone that both buyers and sellers
will be watching closely. A sustained break above that area would strengthen
the bullish case, with a move through 0.5777 giving buyers even greater
technical control.
At the same time, after today’s outsized advance, it would
not be surprising to see sellers defend the 38.2% retracement and attempt to
slow the rally. Should that happen, the first downside target becomes the
former resistance zone near 0.5723, which now serves as an important
support level.
The buyers are firmly in control for now, but
they are approaching a major technical hurdle. Whether they can punch through
it—or pause to catch their breath—will likely determine the next directional
move.
This article was written by fl932d6e52a19643278e0f123bca7198f5 at investinglive.com.
