The NZD/USD pair fell during the session on Wednesday, but got a bit of a bounce from the 0.81 handle. You have to keep in mind that this pair is extremely risk sensitive, and as a result headlines can often have an inordinate effect on it. With this in mind, you have to tread lightly during these days of world events causing markets to move in correlation.
However, you can see that the 200 day simple moving averages just below the hammer that formed on Friday at the 0.81 level. The bottom of that candle and the 200 day SMA line up nicely with the 0.80 level, so I believe that we are looking at a fairly thick "zone" of support that is about 100 pips thick. With this in mind, it makes sense that we would form some type of base here, and end up going to the top of the previous consolidation area.
Targeting 0.83
My target is 0.83 on a break of the highs from Wednesday. I do recognize that the 0.82 level does cause a little bit of resistance, but in reality the New Zealand dollar is one of the favored currencies in the "risk on" environment. While I think there are plenty of headline risk out there, it does appear that the market wants to rally into the end of the year as evident by the stock indices. With this in mind, the New Zealand dollar will move much quicker than the rest of the currencies as it is a lot less liquid than other options such as the Canadian dollar or the Australian dollar.
If the fiscal cliff gets triggered in the United States, this pair could meltdown though. It doesn't look like the market is going to punish Congress until we get about halfway through the month of December before this happens, certainly enough time to reach the 0.83 target. Conversely, if they do, or some type of grand bargain, this pair could really start to climb. That being said, I do believe that this pair is biased to the upside.