At the end of last month, New Zealand/U.S. dollar (NZD/USD) plummeted down to key support just slightly beyond the psychological .7700 level and made a new 11-month low last Wednesday at .7682.
The very next day after making that low, New Zealand Governor Graeme Wheeler addressed the nation that overvalued kiwi poses a key threat to the heavily pressured New Zealand economy. The government may be prepared to act, but since the markets have not seen any signs, the kiwi has stabilized.
This week there is no economic data from New Zealand, so it should not come as a surprise that the kiwi has traded in a tight 88 pip range.
If over the next 48 hours, we see a slow decline towards the .7732 level, a bullish Gartley pattern may be confirmed. If valid, price may rebound towards .7774 level, which could be around the 50% retracement of the C to D leg. If we see price fall below the .7700, the pattern is invalidated and further downside could test .7672.
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