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The New Zealand dollar was one of the best performers during the Asian session, as it surged higher against the US dollar and traded above the 0.7920 level. The New Zealand electronic sales data was released by the Statistics New Zealand during the Asian session, which missed the expectation. However, the release failed to get the attention of sellers. The gain in the NZDUSD pair is mainly due to the recent FOMC meeting minutes. The pair has managed to clear an important resistance area, which might call for more gains in the near term if sentiment continues to favour USD sellers.

There was an important bearish trend line on the 1 hour chart of the NZDUSD pair, which was breached recently. The most important point is that the mentioned trend line was aligned with the 50% fib retracement level of the last leg from the 0.8081 high to 0.7706 low. So, the broken resistance area was crucial. The pair is trading around the 61.8% fib retracement level, which if breached would call for a run towards the 0.8000 level. The hourly RSI is around the extreme levels, which is acting as a psychological barrier for buyers. There is a chance that the pair might correct lower from the current level, retest the broken resistance area and rise again.

So, on the downside initial support is around the 0.7910, followed by the 0.7880 level. Any further losses might turn the bias back to bearish. Let us see how the pair trades in the coming sessions.

Overall, one might consider buying dips as long as the NZDUSD pair stays above the 0.7880 level.

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Posted By IKOFX Technical Team: Online Forex Broker
Website: http://ikofx.com