NZD/USD is still moving sideways lately, as resistance at the top of the range or at the .8100 major psychological level still held this week. At the same time, stochastic is pointing down, hinting at a potential test of the bottom of the range around the .7700 handle.
Shorting at market, as the pair has already shown downward momentum, with a stop above the .8100 mark would yield a good reward-to-risk ratio if one aims for the bottom of the range, which is still roughly 300 pips away.
Take note though that there are plenty of event risks during this latter half of the trading week, with the FOMC minutes up for release and the Jackson Hole Symposium ready to take place. Traders could start positioning themselves ahead of these events so expect additional volatility before, during, and after these market catalysts.
By Kate Curtis from Trader’s Way