There has been a lot of strong price action on the New Zealand dollar pairs this morning after the reserve bank of New Zealand made some statements right on the New York close.
The market picked up with volatility straight away impacting all the NZD crosspairs, including the AUDNZD market.
I’ve been watching this market with keen interest, because it has moved into extended prices after this aggressive really out of a double bottom pattern via parity.
We’re seeing heavy bearish rejection here now at these extended prices – which could be an early warning signal the market is ready to start selling, and kick off a mean reversion.
It’s important to note that the area rejected is actually a resistance area on the daily chart also. These variables (over extended prices, resistance area, bearish price action), could be the perfect storm brewing for a nice corrective move here.
The last 4 hour candle actually closed as a bearish rejection candle also for those who like to work the 4 hour time frame.