NZDUSD Short-Term Retracement (July 12, 2017)

Applying the Fib tool on the latest swing high and low on the 1-hour time frame shows that the 50% retracement level coincides with the broken support. 

The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. The gap between the moving averages is getting wider to reflect stronger selling pressure. 

Stochastic is still pointing up to signal that buyers are in control of price action for now. A larger correction could last until the 61.8% Fib at .7270 or until the 200 SMA dynamic inflection point while a break past that area could mean that bulls are back in control. 

Fed officials shared mixed views on the timing of future rate hikes and balance sheet unwinding. FOMC members Brainard and Kashkari also stressed the need to wait for more inflation data to see if the slowdown is temporary before tightening again.

There have been no major reports from New Zealand so the Kiwi has been sensitive to market sentiment and counter currency price action. Fed head Yellen has a speech coming up and more cautious remarks could mean more losses for the dollar. 

By Kate Curtis from Trader's Way