Selling in New Zealand Dollar is taking off today as traders could be starting to price out an aggressive 50bps hike by RBNZ later in the week. NZD/USD’s decline from 0.7217 is re-accelerating as seen in 4 hour MACD. And it’s on track to take on 0.6858 support.
Overall, the corrective pattern from 0.6804 should have completed with three waves up to 0.7217, after rejection by medium term falling channel. The development suggests that whole pattern from 0.7463 is still in progress. Break of 0.6858 will affirm this bearish case. Deeper decline should be seen through 0.6804 to 38.2% retracement of 0.5467 to 0.7463 at 0.6731 next. This will remain the favored case as long as 0.7051 resistance holds.
Some previews on RBNZ:
