Don’t look now, but it looks like the NZD/CHF is ready to test the bottom of its triangle chart pattern!
Do you think it will last through the RBNZ decision?
As you can see from the hourly time frame below, the pair is approaching the support area before the big event.
NZD/CHF hourly forex Planned by TV
The pair formed lower tops and found support around the minor psychological mark of .5450, creating a stable descending triangle pattern since late June.
The price bounced from resistance earlier this month and seems appropriate to test support again, but will it hold this time?
the The Reserve Bank of New Zealand makes its long overdue policy decision Next, the odds are in favor of tightening the pause this time. After all, New Zealand has entered a technical recession, and inflation appears to be on the way down.
Then again, this potential outcome has been priced in for some time, so we might expect a “buy the rumour, sell the news” reaction to the actual event.
Besides, there is also the possibility of a ‘hard pause’ where policy makers may keep the door open for higher interest rates in the future if the economic situation calls for it.
If so, NZD/CHF could still bounce off the bottom of the triangle near S1 (.5470) and then bounce back up near the pivot point (.5530).
The 100 SMA is above the 200 SMA to reflect bullish pressure at the moment, but the moving averages seem to be oscillating due to the range-bound move.
Meanwhile, Stochastic is also in the middle of the road to reflect a sideways move, barely providing solid directional clues for the time being.
If the kiwi bears stay in the game, a move below S2 (.5420) could be enough to dispel bullish hopes for NZD/CHF. On the other hand, a rally after the minor psychological mark 5550 or R1 (.5570) could indicate that a rally of the same height as the triangle (200 pips) is in progress.
Just take note of Average daily fluctuations for the NZD/CHF pair 42.5 pips when trading this!
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