The NZDUSD moved higher on four of five trading days this week, giving buyers something to build on after a sharp decline from the August high, according to an October 23 analysis published at investinglive.com.

The recovery has included a failed break below the rising 100-hour moving average — a trend gauge built from the average price of the past 100 hours of trading and one of the most closely watched references on short-term charts — and two successful defenses of that level in the current session. Those are encouraging developments for buyers, who are starting to show up on dips and defend a technical level.

Work remains, however. The price still sits below the 38.2% retracement of the August-to-October decline, and until that level is broken, the move higher remains a relatively modest correction within the broader move lower.

A 422-pip decline left buyers a hill to climb

From the August 21 high near 0.5986 to the October 14 low near 0.5564, the NZDUSD fell 422 pips — pips being the standard increments used to measure currency-pair moves — or 7.05%. That was a sizable move: sellers controlled the trend, and rallies along the way gave them opportunities to sell at higher levels. Moves of that size also leave a clearly defined range behind, which is why retracements of the decline now serve as the yardstick for judging how far the recovery has come.

Buying began to gain traction on October 16. Since then, the price has worked higher, moving back above its hourly moving averages and putting distance between the current price and the October low. The question now is whether buyers can turn that initial recovery into something more meaningful. To do that, they need to keep holding support below and start breaking resistance above.

Sellers had their shot below the 100-hour MA

The prior session's correction lower — the only decline over the last four trading days — took the price back below the rising 100-hour moving average. That gave sellers an opportunity to regain control and interrupt the recovery.

They could not sustain the break. The price snapped back above the moving average, leaving sellers having missed their shot.

In the current session, the price returned to the 100-hour MA twice, and both tests found buyers. That helps establish the moving average as a level traders are watching and leaning against.

The 100-hour MA is near 0.56835 and rising. The upward slope carries information of its own: a rising moving average reflects short-term momentum shifting back toward buyers. As long as the price stays above it, the short-term bias remains more bullish, per the analysis. Buyers have a technical reason to stay involved and a nearby reference for defining risk.

A nearby swing area adds to the support

The moving average also sits within a swing area between 0.56736 and 0.56860 — a zone defined by prior turning points on the chart — a combination that makes this an important support region. Buyers would prefer to keep the price above the rising 100-hour MA. If the price slips below it, the bottom of the swing area at 0.56736 becomes the next test.

A sustained move below both would weaken the recovery and give sellers more confidence. The 200-hour MA near 0.56553 would then become another downside reference, playing the same trend-gauging role on a longer intraday timeframe. For now, however, the repeated holds at the 100-hour MA show buyers continuing to defend their position.

The 38.2% retracement is the next hurdle

On the topside, the next key target is the 38.2% retracement at 0.57258. Levels such as 38.2% and the 50% midpoint come from Fibonacci ratios, a long-standing tool of technical analysis that traders use to gauge how far a correction should carry before the prior move reasserts itself. The analyst likes to see the 38.2% retracement reached and broken as a minimum correction of a trend move, because it helps show that buyers can take back a meaningful portion of the decline.

The NZDUSD has not cleared that hurdle yet. Holding support is one part of the recovery; breaking resistance is the next. A move above 0.57258 — and the ability to stay above it — would strengthen the buyers' case and open the door for the next push higher.

The 50% midpoint lines up with an old swing area

Above the 38.2% retracement, attention turns toward the 0.5761–0.5777 swing area, a region with several historical turning points on the chart. The 50% midpoint at 0.57756 also sits near the upper end of the area, giving traders another technical reason to focus on it.

Getting there would take back roughly half of the August-to-October decline. It would also bring the price into a region where sellers could look to lean against resistance.

There are steps to take before that happens. Buyers are making a play, and this week's price action is giving them some encouragement. Now they need to keep the 100-hour MA underneath them and get through 0.57258 to keep the climb going.