NZD/USD has suffered a sharp online currency trading selloff in the past few days due to a weak quarterly CPI reading and a worse than expected dairy auction from New Zealand. After trading above the .8800 mark for a while, NZD/USD has retreated to the .8700 area, which has been an area of interest for the pair.
The Fibonacci retracement levels on the 4-hour online currency trading chart show that the .8700 major psychological level lines up with the 38.2% level too, and this might act as a floor for the selloff. After all, stochastic is already in the oversold area and is making a bullish divergence.
Bulls could push the pair back up once stochastic moves up from the oversold zone or when reversal candlesticks form at the Fib levels. Going long at .8675 with a stop below the 50% Fib or the .8600 mark and a target at .8800 could yield more than a 1:1 online currency trading return on risk.
Online Currency Trading Forecast
The Reserve Bank of New Zealand is set to make another monetary policy announcement later this month and might implement another rate hike. After all, analysts have pointed out that the recent weakness in GDP growth might not be enough to stop the RBNZ from tightening.
However, Governor Wheeler might reiterate that this is the last of the RBNZ rate hikes for now, owing to the fact that the economy appears to be leveling off and falling commodity prices are weighing on dairy demand. In that case, NZD/USD could be in for small online currency trading gains but might not be enough to push it to new highs beyond .8800.
Waiting for stochastic to move higher and indicate a return of buying pressure or waiting for reversal candlesticks to form at the Fibonacci retracement levels could be a prudent decision before taking a long trade.
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