24 Jul 2014
Where next for the 'wingless' Kiwi? Downside void area to exploit...
FXStreet (Bali) - The Kiwi was sold heavily across the board, after the RBNZ rose rates by 25bp to 3.5% but signaled a pause to its tightening cycle, while warning of unjustified NZD levels, adding that it may have big falls.
The flow of sell orders that kicked in after the more neutral stance by the RBNZ going forward, led the NZD/USD to post its lowest level since June 12th at 0.8609 before offers dried up and a corrective took place seeking a new cluster of offers.
Where could the next stack of sellers orders be? From an hourly perspective, a recovery towards 0.8650 will undoubtedly be seen as the first 'value area' to add shorts, with the level converging with a double bottom last July 17, 21. Expect selling interest to be in crescendo should price get marked up towards 0.8670, with this one aligning with the 61.8% fib retrac of the post RBNZ sell-off. Above this level, 0.8690-0.87 represents the origin of the NZD decline, hence an area expected to be crowded with plenty of sellers.
On the downside, taking into account the demand imbalance on the big rise off June 11, there is still a sizeable void area to potentially be exploited until first bids of a demand zone at 0.8560-0.85 is reached.
The flow of sell orders that kicked in after the more neutral stance by the RBNZ going forward, led the NZD/USD to post its lowest level since June 12th at 0.8609 before offers dried up and a corrective took place seeking a new cluster of offers.
Where could the next stack of sellers orders be? From an hourly perspective, a recovery towards 0.8650 will undoubtedly be seen as the first 'value area' to add shorts, with the level converging with a double bottom last July 17, 21. Expect selling interest to be in crescendo should price get marked up towards 0.8670, with this one aligning with the 61.8% fib retrac of the post RBNZ sell-off. Above this level, 0.8690-0.87 represents the origin of the NZD decline, hence an area expected to be crowded with plenty of sellers.
On the downside, taking into account the demand imbalance on the big rise off June 11, there is still a sizeable void area to potentially be exploited until first bids of a demand zone at 0.8560-0.85 is reached.