The NZDUSD is modestly lower today, testing the low of a key swing area between 0.5882 and 0.5892. This zone sits just above the 38.2% retracement of the April–July rally at 0.5877. The pair is currently trading at 0.58975.
The inability to break below that 38.2% retracement is a positive technical sign, even though price remains near the lower extreme of its range since early April. Sellers had their chance to push through this level, and they failed.
For buyers to gain real control, price must stay above the 38.2% retracement (key risk level) and push higher through:
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0.59375 – swing area high from the last four weeks
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0.5947 – 100-day moving average
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0.59576 – falling 100-bar MA on the 4-hour chart
A sustained break above all three would shift the bias toward the upper half of the April range. Until then, while support has held, buyers still have yet to seize decisive momentum. However, for buyers looking for a lower dollar, the 38.2% retracement is the key risk defining level. Break below that level and I would not mess with the buying side.
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This article was written by Greg Michalowski at investinglive.com.