The New Zealand dollar traded lower against the Swiss franc recently and cleared an important bullish trend line on the hourly chart. This particular break might ignite sharp decline in the NZDCHF pair. It is currently trading around the 23.6% Fibonacci retracement level of the last leg from the 0.7641 low to 0.7766 high. The pair is now trading below the 50 hour moving average, which is a bearish sign. However, there is a chance of spike towards the broken trend line where sellers might appear to protect upside in the pair. The hourly RSI has moved below the 50 level, which is another selling signal for traders. So, let us see how the NZDCHF pair trades during the coming sessions.
If the pair continues to move lower from the current levels, then the next area of support is seen around 38.2% fib level. However, the most critical support is at 100 hour MA, which is aligned with the 50% fib retracement level. Any further downside acceleration might call for a full test of the last swing low of 0.7640.
Moving Ahead
There is a high probability that the Swiss franc might correct in the near term, which in turn might cause downside reaction in the NZDCHF pair. In short, the 50 hour MA holds the key for upside and it acts as a resistance, then the pair might move lower.
Trade Idea
One might consider selling around the 50 hour MA with a stop of above the last high of 0.7766.