New Zealand Dollar Cross Pick 05.22.09

[B]My picks:[/B] Sell NZD/USD
[B]Expertise:[/B] Fundamentals and Technicals
[B]Average Time Frame of Trades:[/B] 2 - 10 Days

The NZD/USD surged to a fresh yearly high this week, and the jump in the exchange rate led by the rise in market sentiment failed to meet my expectations for a corrective retracement. Nevertheless, as the Reserve Bank of New Zealand holds a dovish outlook for future policy, while economists forecast the central bank to ease policy further next month, the appreciation in the New Zealand dollar looks to be overdone, and I have placed a short-entry for the following week. I have set my sell entry at 0.6079, the December high, and placed my target at 0.5891, the 20-Day SMA, with my stop at 0.6130, the 5/11 high.