NZD/USD is trying to make up its mind today, although it looks like it is turning lower now. We’re particularly interested in this forex pair because we have an open signal on the short side here.
NZD/USD has retraced higher this week after trending lower for two weeks, but now the retrace might have reached its limit. It started reversing lower last night after the last spike which came from AUD/USD and now it is about 30 pips lower from the highs.
This moving average is being a bit stubborn.
The hourly chart is a bit messed up, but on the H4 chart, we can see that the price is turning down. The stochastic indicator became overbought today which means that the retrace was complete on this timeframe chart.
That’s the reason that we opened our sell forex signal here. The stochastic indicator has plenty of room to run on the downside, but we have an obstacle in the way. The 20 SMA (grey) is standing at the bottom today, and it is providing some medium support.
That’s not the strongest moving average, but it’s an obstacle that the sellers must overcome nonetheless. The 50 SMA (yellow) is standing above which is another obstacle for the buyers, so we have some protection on the top side, too.