Andrei Pehar, Chief Currency Strategist, fxKnight.com
In October of 2000, the NZD/USD began an upswing (with occasional pullbacks) until about March of 2008. This eight-year upswing finally ended with a high at 0.8213 The Kiwi then fell until March of 2009, at which point it resumed rising again, this time to 0.7633; 580 pips below its previous high.
The present long-term Fibonacci pattern retraced to the 23% level, met resistance for four weeks at the 118% level at 0.6885, and then finally broke through to the 127% Fib level at 0.7037 Price then went on to do two additional bonus rounds. The first one went to the 138% level at 0.7225, and the second to the 161% level at 0.7623, which it hit almost precisely on the nose.
The NZD/USD then went into a range after this, in order to catch its breath and decide what to do next.
Recently, price has broken the 138% level at 0.7225 for a second time, and more importantly retested it as the new support; possibly heading toward the 161% level at 0.7623 to form a double-top.
There are three possible scenarios for the NZD/USD going forward, and all of them will present good trading opportunities when taken in smaller chunks on the lower timeframes.
The first is that the pair will continue to range. The wide range at this point is between the 161% level on the high side and the 127% level on the low end, though as of this week it looks like support has been raised to the 138% level. Remember that range boundaries sometimes change, so watch your stochastics for cross-over confirmation.
The next major weekly resistance is the 161% Fib level at 0.7623. If the Kiwi breaks and retests the 161% Fib level, it is likely to go either to its previous high at 0.8213 (marked by the lavender line) or perhaps just beyond it to the 200% Fib level at 0.8265
If price breaks below the bottom of its range at the 127% Fib level at 0.7037 and retests it as resistance, then the next areas of long term support are at the 118% Fib level at 0.6885, and the 0% Fib level at 0.6583