Good morning Traders!
Yesterday, the Reserve Bank of New Zealand surprised the market with a bigger than expected interest rates increase of 0.5% to 5.25% the move saw the Kiwi dollar strengthening against many of it’s trading partners, and in particular the Aussie dollar, where the Reserve Bank of Australia chose to keep rates put at 3.6%
The market has been in a consolidation pattern failing to break either the resistance level at 1.08, or the support level at the 1.0670 area.
The divergence in outlook between the RBA and the RBNZ saw the market breaking and closing below the support level of the 1.0670 area, confirming a downtrend on the 4hr chart, and a Lower Low on the Daily chart.
Drawing the Fibonacci retracement of the latest 4hr move, has the 61.8% retracement in the area of this support level, and clustering with the last buyers spike. I’ll be watching this area for a potential pullback and continuation of the selling momentum.