The RBNZ is widely expected to raise interest rates again this week, so I am looking forward to that potential upside on NZD/USD.
Can the pair sustain its rise after breaching above the neckline of this reversal pattern?
Before checking setup, make sure you know all the The main market movers last week So is this week potential market catalysts!
NZD/USD in one-hour forex Planned by TV
The Kiwi bulls appear to be excited about their forecast for an RBNZ rally, as NZD/USD has already breached the double neckline ahead of the actual event.
This chart pattern extends just over 50 pips, so the pair may be on the rise of at least the same size.
However, the main psychological barrier 0.6300 proved to be a hard ceiling to breach, which leads the price to retreat to the nearby support areas.
The Fibonacci retracement tool shows the levels where buyers may wait to jump in and possibly maintain the uptrend.
It looks like the 38.2% level has already caught some buying interest, as a reversal candle has formed right on this support area.
If the pair goes up for a bigger correction, I might set my eyes on the 50% Fibonacci level, which is close to the minor psychological mark.6250 and the previous neckline resistance.
After all, technical indicators are still showing bearish signals, so the decline may continue until a bullish moving average cross occurs or the stochastic oscillator rises from the oversold zone.