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The 11 day up and down range broken to the downside today
The NZDUSD has been mired in a up and down trading range over the last 11 days. The low of that range came in at 0.71293. The high was at 0.72179 (88 pips in total). Something had to give. The the price cannot just stay in a 88 pip non-trending trading range forever.
Yesterday the buyers took the price back above its 100 and 200 hour moving averages (they were converged near 0.7170). That was more bullish. However, the high stalled ahead of the 0.7200 level (and just above a swing area with a high at 0.71935). Momentum faded.
In trading today, the 100 to the Asian session saw sideways price action with support near the 100/200 hour moving averages. However, those hourly moving averages were tested then the broken in the European session. That break led to a rotation first back toward the lower extreme (at 0.71293). After breaking and failing initially, the last three hours of trading have seen another break with more downside momentum. The Red Box has been broken with momentum.
The lower swing area between 0.7129 and 0.7136 is now risk for sellers. Stay below keeps the sellers more in control.
Although the break lower is more bearish, traders still need to get below other targets to increase the sellers control:
- The swing high from October 18 comes in at 0.7104.
- The 38.2% retracement of the move up from the October 13 low comes in at 0.71005
- The 200 day moving average comes in at 0.70968
All of those levels need to be broken and stay broken to increase the bearish bias.
Overall, sellers are making a play outside of the up and down trading range that has contained the pair over the 11 day period. There is more work to be done, but the sellers are showing some added strength today.
PS Dip buyers can lean against the 200 day moving average with stops on a break.