The NZD/USD pair rose again during the Friday session, but still can’t clear the 0.85 level on the close. This is the signal that I am waiting for in order to go long. It isn’t as if I think it won’t happen, just that I do not want to tie up some of my funding in a trade that isn’t ready to take off. It has more to do with margin than anything else to be honest.
The 0.85 level is obviously a psychologically significant number, but in the end I think the real tell will be when we break the top of the shooting star from the Thursday session. The move would not only clear the big figure, but it will also give us a bit of cushion above it as well. With that, I expect this market to head towards the 0.90 handle over the intermediate term.
The pair is more about the Greenback, and less about the Kiwi.
This pair is more about the Greenback, and the Federal Reserve than the Kiwi Dollar as the Fed looks less and less likely to be able to taper off of quantitative easing in the near future. This means that the Dollar should weaken overall, and the Kiwi is of course tied to commodities. This means that as commodities get a bid, this should drive demand for the Kiwi over the long term as people try to diversify out of Dollar-denominated paper assets, and into “stuff.”
The breaking of the 0.85 level needs to be on the close of the daily chart for me to be bullish enough for an actually trade, and to be honest – I expect that any day now. In fact, I suspect that pullback should be buying opportunities as well, as this could be needed in order to build up momentum to break above the resistance. This is common, as there are normally a lot of sell orders at these areas that have to be taken out. At this point in time, I have no scenario in mind that has me selling this market.
