Trend retracement traders huddle up!
NZD/USD is closing in on a key support zone that could bring buyers back and keep the pair’s uptrend alive.
Let’s take a closer look at the 4-hour chart!
NZD/USD 4-hour Forex Chart Faster with TradingView
The New Zealand dollar was the biggest loser against the dollar on Wednesday, sliding roughly 0.39% as the dollar staged a sharp intraday comeback. An in-line July CPI report briefly cooled Fed rate hike bets, but renewed uncertainty around the Strait of Hormuz standoff put a safe haven bid back under the greenback.
Thursday brings another inflation test, with the U.S. PPI report due at 12:30 GMT alongside New Zealand’s Business Inflation Expectations. That could keep both currencies squarely in the volatility crosshairs.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the New Zealand dollar and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
NZD/USD has pulled back from the .5900 swing high near the R1 Pivot Point and is now approaching a key confluence of support where the lower boundary of the ascending channel meets the 61.8% Fibonacci retracement in the .5800-.5820 area, with the 200 SMA curling through the same vicinity.
Watch for bullish candlesticks and sustained trading above the .5800-.5820 zone, as a bounce here could put the .58861 Pivot Point back in play and eventually open the door toward a retest of the .5900 previous highs near R1.
On the flip side, if bears force a clear breakdown below channel support and the 200 SMA, a deeper slide toward .5780 or the .5750 previous lows becomes the more likely path.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
This NZD/USD setup is built around a zone where multiple technical factors stack at the same price level. Premium members can read our lesson:
Confluence: Stacking the Odds in Your Favor Reading this helps you understand why overlapping signals change a setup’s quality, how to assess a zone before price reaches it, and what separates a high-conviction level from ordinary support.
And if you’re not a Premium subscriber yet, now’s a good time to sign up.
With Babypips Premium, you get full access to School of Pipsology lessons that help you understand not just where key levels sit on the chart, but why a zone backed by multiple confluent factors carries more weight than a single support line.
