- NZD/USD saw a 250-pips knee-jerk rally after RBNZ rate cut decision as the central bank fell short of market expectations for more aggressive easing.
- The pair hit fresh 15-month high at 0.7339 before reversing most of the RBNZ fuelled rally.
- Our previous call (http://www.econotimes.com/FxWirePro-NZD-USD-finds-major-resistance-at-07230-further-upside-only-on-break-above-261236) has achieved all targets.
- The pair is extending upside after bounce off from 50-DMA at 0.7090 on Aug 8th, broke above 20-DMA and 78.6% Fib at 0.7244.
- Momentum studies are bullish, Stochs and RSI are biased higher. We see scope for further upside.
- Focus now on Chinese data flow and key US employment and retail sales data due in the upcoming sessions ahead for further momentum.
- Above 0.7338 the pair finds next major resistance at 0.74 and then 0.7445.
- Bullish invalidation only on break below 0.7116 (converged 20 and 50 DMA), violation there could see test of 0.6956.
Recommendation: Book partial profits, raise trailing stops to 0.7225, target 0.74
