NZD/USD breaking up for good
NZD/USD has been banging its head to the 200 smooth moving average (MA) on the daily chart twice last month and it finally managed to break above it. It is a technical thing as well as a fundamental one and you know, it´s scary how often those two align with each other on the higher timeframe charts. As you can see on the daily chart below the price reached the 200 MA hours before the Royal Bank of New Zealand (RBNZ) delivered their monthly statement and interest rate decision.
That´s because the forex traders get all worked up before a major fundamental event such as a central bank meeting and close their trades at a technical level or indicator such as the 200 MA in this case. Anyway, about 45% of the market was expecting a rate cut but the RBNZ didn´t cut the interest rates and the RBNZ governor Wheeler diminished the hopes for a future rate cut, at least in the short term. The NZD took full advantage of it and it´s now about 150 pips higher and finally above the 200 MA on the daily chart. That has to be considered as a breakout by forex standards.
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