The impending monetary policy meeting by BoJ and the Fed, where we anticipate rates will be held steady is fanning some demand for the kiwi. This apparent strengthening is visible across all kiwi base currency pairs. With this it drops hints that commodity prices are going to rise in the short term.
Technically, just like the USD pair, reversals begun developing on Thursday where price action lead to that inverted hammer and a doji candlestick right at the 61.8 Monthly Fibonacci level. I expected this level to hold ground and form a strong support from all the confluence it formed both on the yearly and monthly Fibonacci. We had the 50.0-in the monthlies and the 23.6-yearly Fibonacci levels falling at the same level. Despite the good retail sales news last week, the Loonie took a beating and right now we anticipate price action to break above 0.958-which is the 161.8 Fibonacci extension levels which will be our prospective TP.
Our trade plan for this week will be as follows:
Buy Limit: 0.627-0.629 (Buy below any retracement at 161.8-100 daily Fibonacci)
Have a good trading day.