For the Kiwi bulls, the recent selloff in the Kiwi might be an opportunity to catch a long trade at a better price. However, the pair has still a few hundred pips to go before reaching potential buy zones.
On the daily time frame, the Fibonacci retracement tool shows that the 50% Fib is in line with a former resistance level. This is also aligned with the .8150 minor psychological level, and this kind of confluence could make it a strong support area.
Stochastic is still pointing down, which means that Kiwi sellers could push the pair much lower in the coming days. If you’re bearish on this pair, there might be some further downside to catch, possibly until the nearest Fib level around .8250.
Waiting for the bounce at .8150 might take a while but this is a long-term setup to watch, as it offers a good return on risk with a stop below .8000 and a potential target to .8550. It might also be worth holding on for the longer run, as it also offers a positive carry.
By Kate Curtis from Trader’s Way