A slight recovery followed, as strongly technical indicators put a downward pressure on the rate. This upward movement is likely to persist until the end of this session when the rate should test the 0.69 area.
The Kiwi is expected to reverse again somewhere near this territory, as the strong support of the 55-, 200– and 100-hour SMAs should reduce the ability of bulls to push the rate even higher.
Following a test of the junior channel, the Kiwi shifted its four-day bearish momentum and managed to move past the weekly S1, the 55-hour SMA and towards a massive resistance cluster formed by the 100– and 200-hour SMAs circa 0.6915. This level coincides with the bottom boundary of a previously-breached channel.
The strength of this pattern was proved mid-session when bulls failed to surpass this area in the wake of disappointing US Core Retail Sales published at 1330GMT. Thus, the base scenario favours a retracement from this channel and a short-term decrease in value for the Kiwi.
The nearest support that could limit the pair is the weekly S1 at 0.6875. In case this level is breached, there are no restrictions until the weekly S2 at 0.6822 is reached.
The combined resistance of the 200– and 100-hour SMAs and the bottom channel line circa 0.6910 proved to be an unbreakable barrier for the New Zealand Dollar. As a result, bears took the upper hand and guided NZD/USD lower until the 0.6840 territory was reached mid-Thursday.
It started to become clear that the rate is unlikely to push up to the senior channel circa 0.6940; thus, its upper border was shifted slightly lower.
By and large, the Kiwi might still push slightly lower in the upcoming hours; however, it should hold its current positioning between the weekly S1 and S2 at 0.6874 and 0.6822, respectively.
Even if the rate reaches the former, likewise reinforced by the 55-hour SMA, the above norther barrier is likely to hold firm.
The New Zealand Dollar was holding its positions steady on Thursday, as it was fluctuating with narrow range around the 0.6850 mark. This session started with a sudden hourly surge which was swiftly halted by the weekly S1 and the 100-hour SMA. Subsequently, bulls took the upper hand and thus had pushed the rate as low as the 0.6780 mark by mid-session.
Technical indicators suggest that a minor recovery should be due soon. However, the scope of this upward movement is yet unknown. It is likely that bulls and bears affect the market in an equal manner, thus allowing the rate to enter a period of consolidation.
The overall movement, however, should be tended north. In case the weekly S2 at 0.6822 is breached, the next significant resistance is the 55– and 100-hour SMA and the weekly S1 circa 0.6860.
The Kiwi has shown solid recovery against the Greenback since mid-Friday. The rate bounced off the junior channel near the 0.6780 mark and initiated a new wave up. This strong bullish momentum left it near the 55-hour SMA at 1200GMT on Monday.
The northern barrier is restricted by the 55– and 100-hour SMAs and the weekly PP. This factor might make bears more confident in the result of which the Kiwi is expected to lose some of its daily gains.
Technical indicators are likewise flashing bearish signals. The nearest support that could restrict a possible decline in price is formed by the distant weekly S1 at 0.6750.
On the other hand, in case upside risks take the upper hand, the pair might push until the 0.6860 area where the upper boundaries of both channels are located.
The Kiwi’s direction during the past trading session was largely influenced by the 55-hour SMA that pushed the rate down to the 0.6790 mark.
This moving average, however, was breached during the day, thus leaving the rate in a narrow range between the given line from below and the 100-hour SMA and the weekly from above.
It is likely that the latter restricts the pair circa 0.6840, especially given the fact that the upper boundary of the junior channel is also located nearby.
Subsequently, the New Zealand Dollar could be confined in the aforementioned range for some time until bears gather enough strength to push the pair below the 55-hour SMA.
A continuous fall would be limited solely by the weekly and monthly S1s at 0.6749.