RBNZ Intervention Remarks Weighing On NZD/USD
- US dollar managed to find buyers around an important support area which might ignite a rally in the short term.
- Euro has a major support around the 1.2700 area which must hold if it has to continue trading higher against the US dollar.
- Canadian dollar has more room for downside against the US dollar as USDCAD sellers fail to capitalize despite positive economic releases in the Canada.
- NZDUSD needs to settle above 0.7960 for more gains.
- 100 moving average is a key pivot for USDCAD in the near term.
The New Zealand dollar has come under pressure recently after there were several statements released by the RBNZ pointing out intervention to control strength in the NZDUSD pair. There is a contracting triangle formed on the hourly chart of the NZDUSD pair, which might act as a catalyst moving ahead. The pair is currently testing the triangle resistance trend line and it looks like struggling to break it. Moreover, the pair is trading around the 61.8% fib retracement level of the last drop from the 0.7996 high to 0.7876 low. So, there is a possibility that the pair might fail to break higher and move lower. There is an important support around the 100 moving average which also coincides with the triangle support trend line.
Intraday Support Level – 0.7910
Intraday Resistance Level – 0.7960
- Overall, as long as the pair stays below 0.7960 it might head lower.
- Sellers need to break the highlighted triangle support area for more losses moving ahead.
Alternatively, if the NZDUSD pair settles above the highlighted triangle resistance area, then it might head towards the last high of 0.7996 where sellers are likely to appear again.
There was a lot of moves noted in the USDCAD pair during the last week. The main reason was several economic releases in the Canada which were mostly in line with the expectation. However, the Canadian dollar buyers failed to take the advantage of the same, as USDCAD continued to move higher. However, the downside was limited in the pair as it found a major support around the 200 hourly moving average. USDCAD is again moving higher towards an important resistance trend lie which is coinciding with the 61.8% fib retracement level of the last move from the 1.1382 high to 1.1208 low. There is a possibility that the pair might climb towards the highlighted trend line and fail to break higher. In that situation, an attempt for a correction would be on the cards.
Intraday Support Level – 1.1210
Intraday Resistance Level – 1.1310
- Selling rallies around the highlighted trend line looks like a good option.
- 200 MA might continue to act as a support for the USDCAD pair.
Currently, the pair is trading around the 100 MA. If it fails to find buyers around the same, then a move towards the 200 MA is possible. Indicator such as MACD is pointing more gains in the pair, as the hourly RSI is also above the 50 level.
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Oliver Miller is one of the best financial analyst with 18 years of online trading experience
New Zealand dollar traded lower this past week after solid gains against the US dollar, but found support around and important area which means there is a chance of recovery in the near term.
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