Besides EURUSD, NZDUSD also experienced a volatile trading week due to surprising rate cut by RBNZ. NZDUSD reached the rate decision after another bullish bounce from the 200 SMA line and in a perfect timing, the rate cut occurred exactly when NZDUSD reached the top of its trading channel and the broken uptrend line that continues to act as strong resistance every time NZDUSD touches it (since February 2016).
You would expect that following surprising rate cut, NZDUSD will crash strongly and even create a lower low, but that wasn't the case when the markets closed last Friday - NZDUSD indeed suffered a major blow of about 200-300 pips, but where did it stop? Again on the 200 days MA. The 200 SMA line played its part as support again and pushed NZDUSD back up, almost to the exact same level NZDUSD was before the rate cut. The consolidation continues.
Two trading scenarios to monitor this week: 1. Bullish – As long as NZDUSD remains above the 200 SMA line any short term pullbacks can be used for potential long entries towards the top of the trading range, 0.68, or the completion of a bearish AB=CD pattern that comes right near the psychological level of 0.7
2. Bearish – 0.68 will be a good trading zone to look for bearish reversals. Besides being the top of a weekly trading range, it'll also be another testing level of the broken uptrend line that so far is very successful in its new role – Resistance.
Tomer, The MarketZone This analysis is part of the Weekly Markets Analysis newsletters
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