The New Zealand rallied during last week’s trading session after the Reserve Bank of New Zealand raised its bank interest rate with 25bps (3.0%-3.25%), making the New Zealand with the highest interest rate against all other major currencies. The pair rose to as high as 0.87019 and later found resistance before retracing back and forming supports at 0.86467.
Weekly bias remains strongly on the upside as 21 and 55 EMA’s crosses on the 1hour and 4hours time-frame shows bullish continuation. MACD and SSRC oscillators are also inline with more demand expectation, however the RS.I and Stochastic is signalling the markets is over-bought and a retracement is about to emerge. So i suggest buying from dip by waiting for a price action formation like pin bar or engulfing pattern to the upside on a Fibonacci retracement point. A clear break of 0.87019 (last week’s high) resistance could see more demand to 0.87779 (May 6, 2014 high) and a break of this resistance would see further push to 0.88420.
However key economic indicators that investors would be looking closely at this week is the NZD Gdp/qq and the FOMC Economic Projections both scheduled to be released later on Wednesday.