After testing .8400 resistance in the past few weeks, NZD/USD looks ready to head back to the bottom of its range, as seen on the 1-hour time frame. There’s support at the .8200 major psychological level, which has held in the past few weeks as well.
Stochastic has reached the overbought mark, which hints at a potential bounce sooner or later. A rally from the bottom of the range could last at least until the middle around .8300 while stronger buying pressure could push the pair up to the top at .8400.
Going long at .8200 with a 50-pip stop or a stop below that previous spike could yield a good return on risk of 4:1. Moving the stop to entry once price tests .8300 is a good way to protect profits and manage risk.
By Kate Curtis from Trader’s Way