NZD/USD Retreats Lower After the Pullback, But is Stuck Between 2 MAs
Yesterday we opened a sell signal in NZD/USD as this pair was retracing higher on the H1 chart. The trend has been massively bearish for this pair since early January, when tensions between US and Iran escalated after the killing of Iran’s Soleimani, which turned the sentiment negative in financial markets.
The outbreak of coronavirus in China turned the sentiment even more negative for risk currencies. Markets have been almost in a panic mode in the last few weeks, as a result. Although, yesterday we saw this pair retrace higher on the H1 chart, as the sentiment improved a little.
The panic regarding the virus decreased, which sent risk assets higher. NZD/USD broke above the 50 SMA (yellow), which has been providing resistance for this pair in recent days. But, the 100 smooth MA (grey) turned into resistance and reversed the price back down today.
The sentiment has turned negative again today, as the cases of coronavirus increased further, above 400k. That also helped reverse this pair down, but the smaller period moving averages seems to have turned into support now. The 100 simple MA (green) was providing support earlier, and now the 50 SMA has caught up with the price. So, now this pair is stuck between these moving averages, so let’s see which side will win. Although, comments about the coronavirus will drive markets around for quite some time, so we will have to keep an ear there.
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