New Zealand Dollar Cautiously Bullish

Commentary: “We have favored the idea that a larger correction is unfolding to more fully correct the 5 wave advance from .6639-.7891 but the decline has yet to occur and Kiwi is testing the wave 5 high. While an expaned flat is certainly possible, we urge caution to bears that are attempting to catch the C wave decline into the .7200’s and lower. The rally from .7435, although choppy, could be a series of 1s and 2s. In this case, the NZDUSD rally could accelerate in a 3rd of a 3rd wave higher. Additionally, the pair is making a bid to close above the resistance line drawn off of the July and November highs. A daily close above there adds fuel to the bullish fire.” The pair closed above the line two days ago, which warranted adopting a bullish bias. We maintain a cautious bullish bias as long as price is above .7575.

Strategy: Flat