NZD/USD lacks clear direction ahead of key events [Video]

NZDUSD is in the red today as it continues to range trade in line with the busy 0.6047-0.6092 area and the 200-day simple moving average (SMA) acts as a strong support point. The correction that started since the December 28, 2023 peak and pushed NZDUSD to a new 2-month low has probably concluded. Market participants appear to be in waiting mode as Wednesday’s Fed meeting and Friday’s US labour market statistics could play a significant role in determining the market’s short-term performance.

In the meantime, the momentum indicators reflect this indecisiveness. More specifically, the RSI is still trading a tad below its midpoint. Interestingly, the Average Directional Movement Index (ADX) is moving lower and its D- subcomponent remains stuck well below the 25-midpoint. More importantly, the stochastic oscillator has made a small move higher, above both its moving average and oversold area, but it appears to lack the strength for a more forceful jump.

If the bulls decide to retake the market reins, they could try to push NZDUSD towards the 50-day simple moving average (SMA) at 0.6176, provided they manage to overcome the resistance set by the December 28, 2023 descending trendline. The October 1, 2019 low at 0.6198 is tad higher with the next target possibly coming at the 50% Fibonacci retracement of the April 5, 2022 – October 13, 2022 downtrend at 0.6272.

On the flip side, the bears are probably keen for another correction. They could try to finally break below the 0.6047-0.6092 area, which is populated by the 38.2% Fibonacci retracement, the July 14, 2022 low and the 100- and 200-day SMAs. The path then appears to be clear until the May 15, 2022 low at 0.5920.

To sum up, NZDUSD is trading sideways as market participants are probably focusing on the key market events and monitoring the stochastic oscillator's reaction.