Moves above and below the 50% retracement
Retails sales in New Zealand was better than expected and stronger stock moves in China helped to push the NZDUSD sharply higher today. That comes after solid gains yesterday as well as traders shifted into “risk on” mode.
Technically, the price today moved above its 200 hour moving average currently at 0.69249. The break above that level increase the bullish bias and traders use level to define and limit risk. A move below would shift the bias more to the downside.
The pair also has trade now above the 50% midpoint of the August trading range that level comes in at 0.6946. The hi in the current hourly bar reached 0.69529. That took the price between a swing area from 0.6952 to 0.6956. The 0.594 to 0.6956 will be eyed for signs of topping/a breather but with stops on a break above the area. Having said that, a move back below the 200 hour moving average is all needed to increase the bearish bias after the two day surge to the upside.
There has been some retracement in premarket stocks which may limit the currencies “risk on” upside. The the NASDAQ index which was up around 40 points in early premarket trading is currently up around five points.