With the RBNZ next up to the oche, there could another opportunity to fade the reaction.
One of the simplest trades you can do is fading a one off move that goes against the trend.
The AUSUSD moves recently have shown that anything that has gone against the bullish trend hasn't lasted. The same could happen in the kiwi tomorrow.
A cut from the RBNZ is pretty much baked in, if we believe the chatter. A cut isn't going to surprise anyone. That still won't stop the price from dipping if they announce one.
NZDUSD daily chart
I'm liking the look of another a rate cut dip long in the kiwi. Ideally I'd like a juicy dip down to 0.6900 which is just ahead of the strong looking 0.6880/85 area. That's probably wishful thinking from here and it would mean some big news other than a rate cut from the RBNZ.
Plan B would be a dip to 0.7080/60 odd, around the 100 wma and 55 dma, but even that might be a push considering what's expected.
Plan C is to play the numbers game and look for a dip over 50 pips but probably closer to 100. As always, conditions need to be fulfilled. The RBNZ message will be important. If they're very dovish and hint at more rate cuts then that will need to be considered when picking an entry point. It may well be that we see some of those lower levels in that instance. While the lower levels might be juicy for a long, they can also serve as a get out point for any longs from above. At all times we need to know our entries and exits whatever the strategy.
I like what the charts say and I like what price has been doing and if it all falls into place, I'll have myself a trade.
