$NZDUSD reached the rate decision after another bounce from the 200 line and in a perfect timing, the rate cut occurred exactly when $NZDUSD reached the top of its trading channel and the broken uptrend line that continues to act as strong resistance every time $NZDUSD touches it (since February 2016).
You would expect that following surprising rate cut, $NZDUSD will crash strongly and even create a lower low, but that wasn't the case when the markets closed last Friday - $NZDUSD indeed suffered a major blow of about 200-300 pips, but where did it stop? Again on the 200 days MA.
The 200 line played its part as support again and pushed $NZDUSD back up, almost to the exact same level $NZDUSD was before the rate cut.
The consolidation continues.
Two trading scenarios to monitor this week:
1. – As long as $NZDUSD remains above the 200 line any short term pullbacks can be used for potential long entries towards the top of the trading range, 0.68, or the completion of a pattern that comes right near the psychological level of 0.7
2. – 0.68 will be a good trading zone to look for reversals. Besides being the top of a weekly trading range, it'll also be another testing level of the broken uptrend line that so far is very successful in its new role – Resistance.
Tomer, The MarketZone
This analysis is part of the Weekly Markets Analysis newsletters
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