NZD/USD – sell-off stalled around 50% Fibo, rate cut bets weigh

Overnight sell-off in the NZD/USD ran out of steam around 0.7138 (50% of 0.7325-0.6951), opening doors for a weak bounce amid rising RBNZ rate cut bets.

Eyes 23.6% Fibo

The spot appears on track to re-test 0.7171 (23.6% of 0.6675-0.7325) levels. Tuesday’s spike in NZD proved to be short lived as RBNZ rate hike bets spiked after RBA reduced interest rates to record low. New Zealand’s central bank rate decision is schedule don August 11.

Dovish expectations led to a sharp drop in the pair from 0.7246 to 0.7141 on Wednesday. It remains to be seen if the currency pair retakes part of its losses today or slides further on RBNZ rate cut talk.

NZD/USD Technical Levels

The spot was last seen trading around 0.7167 levels. A break above 0.7171 (23.6 % of 0.6675-0.7325) could yield  a move higher to 0.7229 (Friday’s high). On the downside, breach of support at 0.7138 (50% of 0.7325-0.6951) would open doors for 0.71 levels.