Last week, the New Zealand dollar was on a one-way trip to the highest since May. Today, NZD/USD is pulling back from overbought conditions.
So far, NZD/USD has found some support at the late-September high of 0.8435. Below that, the Fibonacci levels from the six-day rally are a good guide.
NZDUSD 4 hour chart
I like NZD/USD for the medium term but the daily RSI was at 72.5 on Friday and a corrective pullback was due. Don’t look for an extended pullback but another 100 pips of declines is certainly feasible. Below that, I’d look to build longs, especially since the RBNZ meets next Thursday (same as the Fed) and they are likely to signal the beginning of a rate hiking cycle.