Search ForexCrunch
  • NZD/USD plunged, but the pair could turn to the upside after the RBNZ.
  • The pair registered a strong sell-off also because the DXY has managed to jump above 93.00 level.
  • In the short term, we can still search for long opportunities around the downtrend line.

The NZD/USD price dropped by 1.78% in today’s trading session after the New Zealand government put the nation under lockdown. It’s traded at 0.6911 at the moment of writing above 0.6900 lower low and psychological level.

Are you interested to learn more about day trading brokers? Check our detailed guide-

The pair dropped aggressively also because the Dollar Index has managed to increase after last week’s sell-off. The DXY stands above the 93.00 psychological level at 93.10. Thus, further growth could signal USD’s appreciation versus its rivals.

Tomorrow, the Reserve Bank of New Zealand will publish its Official Cash Rate. As you already know, an interest rate hike by 0.25% is expected, from 0.25% to 0.50%. So, the volatility will be huge around this high impact event.

Also, the RBNZ Rate Statement and RBNZ Press Conference could bring high action in the early morning, in the Asian session, so you’ll have to be careful. NZD/USD is traded within a major support zone, so hawkish RBNZ could help the pair to rebound in the short term. Also, we cannot exclude a temporary decline in DXY after today’s rally.

NZD/USD price technical analysis: Support zone to save further fall

NZD/USD 4-hour price chart
NZD/USD 4-hour price chart

The NZD/USD price registered a massive drop after failing to stabilize above the 38.2% retracement level. As a result, it has escaped from the ascending pitchfork’s body, signaling that the upside scenario was invalidated.

It is now located below the 0.6922 static support, below the weekly S2 (0.6929), and under the ascending pitchfork’s first warning line (WL1). The next downside target is seen at the downtrend line and around 0.6880 level.

Are you interested to learn more about forex signals? Check our detailed guide-

Technically, NZD/USD has invalidated a bullish reversal after failing to approach and reach at least the 50% (0.7098) retracement level. Still, in the short term, NZD/USD could bounce back. It could come back to test and retest the immediate resistance levels before dropping deeper.

We could search for bullish opportunities around the downtrend line. For example, a pin bar, a false breakdown with great separation, or a major bullish engulfing could bring new long opportunities in the short term.

Looking to trade forex now? Invest at eToro!

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.