NZD/USD fell for most of the Tuesday session as the stock markets around the world flashed red. However, there was a bit of a rebirth of bullishness in this market towards the end of the day that saw higher prices for the Kiwi dollar. The pair ended up forming a hammer by the end of the session, and this just confirms how significant the break of the 0.80 level a couple of sessions ago really was.

The pair has been going like gangbusters over the last several weeks, and this latest move simply puts an exclamation point on that. The pair should continue to show real strength as the commodities markets in general look fairly healthy. (Kiwi dollar always seems to follow the overall attitude towards commodity markets.) The fact that even during risk off days the currency has been able to appreciate lately shows just how strong the up move really is in this pair.

The strength of all commodity dollars is being played out at the moment, in a kind of carry trade as bond yields are low everywhere. (At least everywhere most traders are willing to be involved with.) The ability to collect a positive swap at the end of the day certainly has many traders interested in this pair lately, and as a result, we think this pair continues higher.

The breaking of the top of the Tuesday range is our buy signal, and we will not sell until we close well under the 0.80 level. The pair has been so bullish of late; we are not interested in trying to fight the sentiment at this point in time. The Kiwi is often sensitive to headline risks from around the world, but at the moment, it seems to be willing to ignore Europe.

With all of this in mind, we are buying on a break of the highs from Tuesday, or on dips that show supportive candles as long as we are above the 0.80 level going forward. The pair looks set for a bit of a correction, but again - we don't believe that nay healthy correction will see sub-0.80 levels.

NZD/USD

NZD/USD Forecast January 25, 2012, Technical Analysis

NZD/USD Pivot Points (Time Frame: 1 Day)

 Name  S3  S2  S1  Pivot  R1  R2  R3

 Classic
0.8004
0.8029
0.8071
0.8096
0.8138
0.8163
0.8205

 Fibonacci
0.8029
0.8055
0.8071
0.8096
0.8122
0.8138
0.8163

 Camarilla
0.8094
0.8100
0.8106
0.8096
0.8118
0.8124
0.8130

 Woodie's
-
0.8033
0.8078
0.8100
0.8146
0.8167
-

 DeMark's
-
-
0.8151
-
0.8084
-
-