The Reserve Bank of New Zealand’s decision to maintain interest rates at 5.5% was anticipated, but their stance leaned towards the hawkish side. They didn’t dismiss the possibility of future rate hikes to manage inflation. This sentiment drove the NZDUSD price up, surpassing the 61.8% Fibonacci retracement level of the July to October downward movement, which was at 0.61674. The pair reached a peak of 0.6207 before encountering selling pressure and retreating.
This pullback below the 61.8% retracement level has turned it into a resistance point, disappointing those who had bet on the break. A sustained move above the 0.6167 level is needed to reinforce a bullish outlook. Meanwhile, on the downside, the area between 0.6104 and 0.6117 is likely to attract support buyers, with a stop-loss order suggested below it. However, a crucial support level is at the 50% midpoint of the July 2023 high and the 200-day moving average, both converging around 0.6092.
If sellers fail to drive the price below this dual technical level, the bias would still favor buyers. Thus, the market is currently in a state of flux, with buyers and sellers jostling for dominance. The next significant market move could be triggered either by a breakout above the 61.8% retracement level (0.6167) or a breakdown below the combined support of the 200-day moving average and the 50% retracement level (0.6092).
This article was written by Greg Michalowski at www.forexlive.com. Source