Despite rate cut, still heading towards 0.7

FX:NZDUSD   New Zealand Dollar/U.S. Dollar
Besides $EURUSD, $NZDUSD also experienced a volatile trading week due to surprising rate cut by RBNZ.
$NZDUSD reached the rate decision after another bullish bounce from the 200 SMA 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 SMA 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. Bullish – As long as $NZDUSD remains above the 200 SMA 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 bearish AB=CD pattern that comes right near the psychological level of 0.7

2. Bearish – 0.68 will be a good trading zone to look for bearish 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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