The kiwi fell to a fresh six-year low against the U.S. dollar on expectations that the Fed will begin tightening monetary policy later this year. New Zealand's currency downward spiral is tentatively finding support now, but bearish momentum may only be taking a break here.
On my June 21st kiwi post, I targeted an acceleration of the longer-term bearish trend to target .6825, with deeper support coming from the .6560. The 240-minute NZD/USD chart is displaying a potential bullish ABCD pattern that could help support a round of profit taking. If valid, we could see price target the .6600 handle before resuming its bearish slide.
The next major support level will come from the .6250 region which is the 261.8% Fibonacci expansion level of the February low to April high move.
The trade: Sell NZD/USD at .6595 with a stop loss at .6645 and a take profit at .6445. The Risk/Reward Ratio is around 1: 3
Edward J. Moya
Senior Market Strategist
WorldWideMarkets Online Trading