NZD/USD Also going strong

Trading Discussion Currencies
1

The Kiwi is following its Australian neighbor as it also made an impressive break-up of the 200 SMA at 0.80. However, the bullish session started much sooner when the NZD broke-through the resistance at 0.78. Strong buyers entered the market during that break-up and lifted the pair up to its current levels at 0.82. The pair is now facing the resistance at 0.825, but an entry here, when the pair is overbought, is extremely dangerous. Opening a position in such extreme point is an opportunity for the pros to take advantage of the amateurs, and therefore it would be wisely to wait for correction down before opening a long position. Such a correction might occur if the price crosses below yesterday’s bottom, and can reach Fibonacci 50% levels around the 200 SMA at 0.80.


2

Unlike the EUR, the NZD was weakening against the USD yesterday and the pair broke an important support at 0.825, which was a former break-up area. The Kiwi is a strong currency, mainly because the interest in New Zealand is higher than most of the developed countries and therefore it attracts many investors and funds. However, on the technical aspect, there should be a correction for the recent rally and yesterday’s break-down might be the beginning of this correction. A possible target for this potential bearish session could be a retest to the break-up level at 0.80, which is around Fibonacci 50% level. The investors are waiting for the interest rate announcement by the RBNZ tomorrow that expected to keep the rate on 2.5%.