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The New Zealand dollar was seen trading higher after the RBNZ interest rate decision in which the central bank decided not to introduce any change. This caught the attention of the New Zealand dollar buyers. It was already trading around the oversold readings against the US dollar. The NZDUSD pair spiked towards the 0.7870 resistance area. The New Zealand Food Price Index (FPI) released by the Statistics New Zealand was also released during the Asian session. The outcome missed the mark as it registered a decline of 0.5%, compared with the last time reading of 0%. This did not affect the New Zealand dollar as the NZDUSD pair continued to trade higher.
There was a bearish trend line formed on the hourly chart of the NZDUSD pair, which was taken out after the announcement. The pair climbed towards the 0.7850-70 area where sellers managed to protect the upside in the pair. There is a chance that the pair might correct lower from the current levels and even test the broken trend line. There is an important support formed around the 61.8% fib retracement level of the last leg from the 0.7671 low to 0.7869 high, which also coincides with the 200 hourly moving average. Any further downside in the pair would be dependent on the incoming US economic data.
On the upside, the recent high of 0.7869 high might act as a resistance in the short term. A break above the same might push the pair towards the 0.7900 area.
Overall, one might consider buying dips as long as the pair is trading above the highlighted trend line.
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Posted By IKOFX Technical Team: Online Forex Broker
Website – http://ikofx.com
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