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MTrading Team • 2023-07-12

NZDUSD crosses 200-EMA within bearish channel despite RBNZ inaction

NZDUSD crosses 200-EMA within bearish channel despite RBNZ inaction

NZDUSD jumps to a three-week high while piercing the 200-EMA even as the Reserve Bank of New Zealand (RBNZ) refrains from lifting interest rates for the first time since October 2021. It’s worth noting, however, that the Kiwi pair remains within a five-month-old bearish channel while approaching the immediate hurdle, namely the previous monthly high of around 0.6250. Should the quote manage to remain firmer past 0.6250, the stated channel’s top line, close to 0.6290, quickly followed by the 0.6300 round figure, will be crucial to watch as a clear break of the same won’t hesitate to challenge the yearly peak marked in February around 0.6540.

On the flip side, a daily closing beneath the 200-EMA, around 0.6220 at the latest, can trigger NZDUSD pullback toward the 38.2% Fibonacci retracement level of October 2022 to February 2023 run-up, near 0.6150. Following that, a six-week-old rising support line surrounding 0.6085 and the 50% Fibonacci retracement level of near 0.6030 can test the Kiwi pair sellers. In a case where the quote remains weak past 0.6030, the 0.6000 psychological magnet precedes the stated channel’s bottom line, near 0.5930, to act as the last defense of the buyers.

Overall, NZDUSD shrugs off RBNZ’s status quo and is on the way to challenging the bearish chart pattern.

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