The NZDUSD is down -0.93%, making it the biggest mover among the major currencies versus the U.S. dollar today. The backdrop is firmly risk-off, with U.S. equities under pressure and higher U.S. rates after strong data adding to the dollar’s bid.
From a technical perspective, the pair attempted to rally early in the session but stalled near the broken swing low from September 4. That level, breached yesterday, has now flipped into resistance and helped cap the upside.
The subsequent slide extended the downside range, with the pair breaking through the August low at 0.5800. In doing so, it also moved below the 50% midpoint of the trading range since the April low at 0.58017. That area is now a risk defining level for sellers. Staying below is more bearish.
With both the August low and the midpoint support now broken, the technical bias has tilted further in favor of sellers, keeping the downside momentum firmly in play.
On the downside, the NZDUSD is now testing a swing area between 0.57599 and 0.5771. Buyers are attempting to defend this zone, and holding above it would provide some near-term comfort.
However, for buyers to regain more meaningful control, the pair would need to climb back above the 50% midpoint at 0.58017. That would give sellers some “cause for pause” and shift the balance of risk away from immediate downside momentum.
If the swing area fails, sellers would remain firmly in control, with the next target coming in at the 61.8% retracement at 0.57268. A break of that level would further confirm bearish momentum and open the door to deeper declines.
This article was written by Greg Michalowski at investinglive.com.