The New Zealand dollar dived sharply during the Asian session, as the RBNZ interest rate decision ignited a downside reaction in NZDUSD. The central band surprised the market and reduced the interest rates, which pushed the pair lower by more than 200 pips. The NZDUSD pair is now trading around 0.70 handle and finding bids, which increases the chances of correction in the near term.
Once the pair retraces from the current levels in two waves, then we can plan on entering a sell trade, as the trend is down and more losses are likely moving ahead towards 0.6500.
Technical Analysis
Monthly – Sellers might target the long term trend line as highlighted below.
Weekly – In the medium term, our target could be the previous swing support area at 0.6500.
Entry:
H1 – We can enter a sell trade for the NZDUSD pair once the pair retraces from the current or a bit lower levels in two waves.
Target 1: 0.6850
Target 2: 0.6800
Stop Loss: Above the high created before entering into the trade.
Video Explanation:
