Forex Technical Update
NZD/USD Daily Chart 1:30PM EDT 7/2/2012
The NZD/USD is trading just under 0.8050 after last Friday's (6/29) risk rally on the back of the EU summit. Here the NZD/USD is up against a declining trendline projected from the 2 major resistance pivots in 2012, seen in the daily chart. At the moment, this trendline is in confluence with a previous consolidation support area. Also, note that the 61.8% retracement of 2012 bear run from 0.8470 to 0.7453 is at 0.8080.
A break above 0.8080, and 0.81 exposes the market to 0.8250 (78.6% retracement), and also the start of a pivot zone. This can be a short-term bullish target for a breakout above the resistance factors just above the current price action.
In the 1H chart we see that the market continues to make higher highs and higher lows, but may be slowing the risk rally as we begin this trading week. The momentum has slowed according to the bearish divergence signal with the RSI. If we do get some short-term correction to the downside. The first level to monitor is 0.7960.
Also note that if the market is to extend the bullish momentum started on Friday, the 1H RSI reading should stay above 40. On the other side of it, it would probably require a break below 0.7840 with the 1H RSI dipping below 30 to convince the market of a reversal against June's rally.
NZD/USD 1H Chart 1:35PM EDT 7/2/2012
Fan Yang CMT is the Chief Technical Strategist, trader, educator and a of the main contributors to FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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