Forex Technical Update
NZD/USD Daily Chart 11:55PM EDT 6/18/2012
The NZD/USD has been rallying sharply after a double bottom formed at the end of May, beginning of June. The above chart in the daily time-frame shows the rally now pushing near 0.7950, which is where the 200-day simple moving average reside. Then there are psychological levels coinciding with previous support pivots at 0.8050 and 0.81. Above 0.81, we would likely break above a a trendline holding the bear run since end of February-beginning of March.
There is still upside risk toward 0.80, and 0.8050, but if the market respects the 200-Day SMA, we might see that if NZD/USD first pushes below 0.7880 instead of pushing above 0.7950. With the market still in a rally, it would be tough to break below 0.7775 pivot and 200-hour SMA, unless the EUR/USD also falls below 1.25.
This theory is based on today's price action where the EUR/USD led the decline, but has not broken key support levels (first 1.5430, then 1.54). But the ability to do so might reflect a euro bearish continuation based on further fall out from the eurozone debt crisis, which can ripple through the world to cause risk-off trading, a condition that NZD/USD would need to halt June's persistent bull run.
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.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.