NZD/USD has been selling off strongly in the past few days, yet the pair could be in for a relief rally as it is finding support at the bottom of the rising channel forming on its 4-hour forex time frame.
Stochastic has already reached the oversold zone, indicating that a bounce might be in the cards, as price tests the support at the .8500 major psychological level. If that happens, NZD/USD might be able to climb up to the area of interest at the middle of the channel, which is around the .8700 mark.
On the other hand, a move below the rising channel could confirm that the longer-term uptrend is already over and that more losses are in the cards for this pair. NZD/USD could move all the way down to the next support zone around the .8300 mark or even until .8100.
By Kate Curtis from Trader’s Way