By: Bastian Rubben
The stock markets slid yesterday after the release of the FOMC meeting minuets, in which the FED was not sure whether QE3 would be efficient. Less than expected factory orders had a negative impact on the markets as well, but Apple's new high helped NASDAQ to close in a positive momentum, although the increase of the volatility indicates that the sellers are starting to move.
If you ever wonder, why I always start my analysis with a brief of the US stock market is because 90% of the time, the stocks have a direct impact on the USD and it is obviously relevant for each pair of currency, whether it is a major pair or exotic pair. The declines of the stocks supported the USD yesterday, and since the futures are down this morning, the currency continues strengthening.
The pair NZD/USD has been moving between the resistance at 0.825 and the support of the 200 SMA, as the USD managed to prevent the Kiwi from breaking through the resistance. The pair reached the resistance yesterday and if the current pattern remains, the NZD will slide towards the 200 SMA, around 0.81.
The Kiwi is stamping against the Euro, which broke the important support versus the USD, at 1.33, and since both currencies are weakening, the pair EUR/NZD has not chosen a direction yet. The ECB press conference is today's main event and if the investors encouraged by the central bank, the pair might make the bullish reversal and rise towards 1.64. However, a break-down of the support at 1.615 might take the Euro under 1.60 against the NZD.
