NZDUSD has formed higher lows on its hourly time frame, moving above a rising trend line that might be in for another test soon. The Fibonacci retracement tool shows additional levels where buyers might be waiting.

The 61.8% level is closest to the trend line support around the .6300 major psychological mark. This also coincides with a former resistance zone and the 100 SMA dynamic inflection point.

The 100 SMA is above the 200 SMA to confirm that the uptrend is more likely to resume than to reverse. A shallow correction could already find buyers at the 38.2% Fib around the .6400 level or the 50% Fib at .6341.

If any of these areas hold as support, NZDUSD could recover to the swing high at .6468 or higher.

Stochastic is still on the move down to show that selling pressure is present, and the oscillator has some room to head south before reflecting exhaustion among sellers. Similarly RSI has some ground to cover before reaching the oversold area, so the correction could keep going until it does.

NZDUSD would likely take cues from the central bank events this week, namely the RBNZ decision and FOMC minutes.

Another 0.50% rate hike is expected from the RBNZ, especially since wages and price pressures continue to rise. Domestic growth has been resilient to global headwinds, giving the central bank scope to tighten policy.

Meanwhile, traders are keen to find out if the Fed has altered its forward guidance to reflect weaker inflationary pressures of late. However, it’s important to note that the latest FOMC meeting took place before the latest set of CPI and PPI figures were released.

Still, any cautious remarks from the minutes might be enough for traders to price in weaker odds of another 0.75% hike from the Fed, leading to a dollar selloff and a boost for higher-yielding currencies like the Kiwi.