NZDUSD buyers defend 0.5579 support, stall at 200-HMA

NZDUSD initially declined following disappointing New Zealand employment figures released earlier in the session. However, sellers failed to drive the pair beneath a well-known support zone around 0.5579. This price area has drawn buying interest multiple times since late September and throughout October. Buyers once again defended that level on Tuesday, triggering a bounce as markets responded to the outcome of the US presidential election.

The defense of this support holds technical significance. Traders had a clearly defined level to anchor their risk management, and they successfully protected it. Still, merely defending support is not enough to establish a bullish trend. For the bias to turn more positive, buyers must now reclaim the resistance levels above.

The 200-period moving average on the hourly chart halted the recovery.

The bounce from the established support managed to surpass the 100-hour moving average around 0.5622. However, it encountered resistance at the declining 200-hour moving average, currently near 0.56418. Sellers stepped in at this level, stopping the upward momentum and reinforcing that moving average as a crucial overhead indicator.

If buyers can push the pair above and sustain that level, they would gain greater control over the market. Until that happens, sellers can argue that the rejection at resistance shows the barrier remains effective.

Before reaching the 200-hour moving average, there are closer obstacles: the 100-hour moving average near 0.5622 and the swing zone between 0.56256 and 0.56333. Buyers must turn these levels into support to refocus their attention on the 200-hour moving average.

What are the next potential targets?

A decisive close above the 200-hour moving average would pave the way to the next consolidation zone from 0.56681 to 0.56860. Beyond that, the 0.57085 level stands out. A triple top formation near that price contributed to sellers' conviction to drive the pair lower in October. It continues to be a significant objective should buyers extend today's recovery.

On the downside, the 0.5579 level continues to serve as the critical support. As long as the price stays above it, buyers still have a base for another bounce. If it breaks, the support that has repeatedly drawn buying interest would give way, potentially leading to a decline toward the low near 0.5564.

Currently, buyers have held the support floor while sellers have maintained the resistance at the 200-hour moving average. The next trend hint will emerge from whichever side yields first.