(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; 50-period simple moving average in light blue.)
7/31/2009 € NZD/USD € Price action on NZD/USD, a daily chart of which is shown, has been consolidating around major resistance in the 0.6600 price region for the last two weeks. This consolidation mirrors recent price action in other dollar-based currency pairs. Not only does the current resistance represent the key 0.6600 horizontal support/resistance region, it also represents a major long-term downtrend resistance line extending all the way back to March 2008. Therefore, this pair is currently at a critical juncture. Momentum readings on the displayed Stochastics are showing the pair in prolonged overbought conditions and pointing down. If resistance is respected with a bounce to the downside, a major downside support target resides around the 0.6100 price region. In the event of any strong breakout above the current confluence of resistance, a key upside resistance target resides around the 0.6800 price region.
James Chen, CMT
Chief Technical Strategist
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