NZD/USD just broke below the key support level at .8200 last week but it appears that price needs to retrace before heading any lower. On the 1-hour time frame, the 38.2% Fibonacci retracement level is close to the broken support, which might then act as resistance.
However, stochastic has just reached overbought levels but hasn’t shown any sign of crossing down yet. Kiwi bulls might have enough buying power to push the pair a little higher, perhaps until the next Fib levels before the selloff resumes.
Shorting at market with a stop above the 61.8% Fib level and a target of 200 pips, which is the same size as the previous range, could yield a decent return on risk for a short-term trade.
By Kate Curtis from Trader’s Way