New Zealand Dollar Cross Pick 05.29.09

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

The New Zealand dollar continued to advance against the greenback this week, and reached a fresh trend high of 0.6388, and the jump in the exchange rate fails to trigger the short entry I placed last week. Despite the rise in the pair, deteriorating fundamentals paired with expectations for a rate cut by the Reserve Bank of New Zealand is likely to weigh on the kiwi-dollar over the near-term. Moreover, the relative strength index for the NZD/USD remains above 69, and I expected to see a corrective retracement over the following week as the pair remains overbought. As a result, I have placed another short entry at 0.6086, the December high, and set my target at 0.5834, the 5/15 low, with the stop at 0.6132, the November high.