I’m seeing a textbook break and retest situation forming on the daily time frame of NZD/CHF!

Will this area of interest hold as a ceiling this time?

Take a look at this long-term potential support-turned-resistance zone I’m watching:

NZD/CHF Daily Forex Chart by TradingView

Missed that bearish breakdown and selloff on NZD/CHF recently?

The pair could be gearing up for another major wave lower, as it pulls up for a retest of the former support zone around the .5200-.5300 psychological levels.

The Fibonacci retracement tool even shows that this area of interest is right around the 50% level while the pivot point (.5310) is closer to the 61.8% Fib.

Can this Kiwi pair resume its slide soon?

Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the New Zealand dollar and Swiss franc, then it’s time to check out the economic calendar and stay updated on daily fundamental news!

If any of the Fibs are able to keep gains in check, NZD/CHF could set its sights back on the swing low near S2 (.4950) or at least until the area of interest at S1 (.5090) in the near-term.

Recall that the Reserve Bank of New Zealand (RBNZ) surprised market players with an interest rate cut last week, citing cooling inflation and slower growth prospects as reasons for easing. RBNZ head Orr also mentioned in his speeches later on that he is more confident that inflation is back in their 1-3% target range, increasing the odds of more rate cuts down the line.

There’s not much in the way of major reports from Switzerland this week, though, leaving the franc as a potential counter currency or safe-haven option in case risk-off flows pick up.

Just make sure you look out for any big swings in market sentiment from this week’s set of top-tier catalysts!