The NZDUSD is moving lower, hitting fresh lows for the day, and once again testing yesterday’s low near 0.6263. This level sits below the 38.2% retracement of September’s trading range at 0.62727. Earlier in the day, the price briefly climbed above the 200-hour moving average (at 0.6299), but it couldn’t hold, and sellers took control, pushing the price back down. The sellers are making their move.
So, what’s next?
To strengthen the bearish bias, the first key step is breaking below 0.6263, followed by a push through the swing level at 0.6253. The more critical target for the sellers lies at the 50% midpoint of September’s trading range, around 0.62407. This level is also reinforced by the rising 100-bar moving average on the 4-hour chart (lower blue line on the chart below). Below that, the 200-bar moving average on the 4-hour chart (lower green line on chart below), at 0.62133, becomes the next target—a level the NZDUSD hasn’t traded under since August 16.
On the other hand, what would frustrate the sellers?
A move back above the 200-hour moving average of 0.6299 would be a big disappointment for those holding short positions.
Looking ahead, the fundamentals are also in play. Next week, the Reserve Bank of New Zealand is set to meet on Wednesday morning (New Zealand time) or Tuesday night (U.S. time). Market expectations are leaning toward a 50 basis point cut, as inflation continues to ease. At their last meeting, the central bank cut rates by 25 basis points—the first reduction since March 2020.
The technical and fundamental factors are setting the stage for what could be a decisive week for the NZDUSD. Keep an eye on those key levels
