NZD/USD rose during the session on Thursday, recapturing most of the losses from the Wednesday session. The pair continues to get a boost from the commodity trade, and since the futures markets on the whole were fairly stable on Thursday, we saw a bounce.
The level that we bounced from was the 38.2 Fibonacci level, and the 0.81 level. This makes sense that the market found support here, and the 0.80 level below was probably even more supportive. The Dollars in general all seem fairly strong, as the US, Canadian, Australian, and New Zealand dollars are gaining against most other currencies around the world presently.
The market in this pair for us is a buy only' one, and the top of the Thursday range would be a point in which we would consider buying this pair again. We think that the consolidation area above in the blue rectangle is about to become our range again. The 0.8450 level will continue to be resistive, but we think it gives way eventually as the Kiwi continues to strengthen overall. The yield in this pair is positive, so in a low-yield world, this looks attractive.
The downside of this pair isn't available to us for trading until we see the 0.80 level give way, and even then we aren't entirely comfortable selling the Kiwi. More than likely we don't see this in an aggressive way unless something bad happens to the world economy. The commodity trade should continue to gain as many of the world's central banks are in easing mode, making many fiat currencies unattractive in general, and having traders buy stuff in order to protect wealth.
The overall trend is still up, and we choose to look at this chart through that prism. As a result, buying the Kiwi is one of our favorite trades at the moment. The Kiwi will continue to be strong overall, and especially against other currencies around the world. This is one of those times where a more exotic cross could give you better returns, although we do like this particular market.
NZD/USD Forecast March 16, 2012, Technical Analysis
NZD/USD Pivot Points (Time Frame: 1 Day)
Name S3 S2 S1 Pivot R1 R2 R3