The NZD/USD pair went back and forth during the session on Monday, essentially ending the session unchanged. We did break the top of the hammer from the Friday session though, and that of course is bullish. I believe that the 0.8250 level continues to offer support, and the area should continue to offer buyers opportunities to get into this market as we continue to consolidate between there, and the 0.85 level which offers quite a bit of resistance.
If we can get above the 0.85 level, I believe this market would take off and head towards the 0.90 level. It will be a straight shot higher, but as long as the US dollars on the back foot, there's no reason to think that the New Zealand dollar will do better. Granted, it will go straight up but in the end I believe that as long as the Federal Reserve stays within its lack of ability to taper off of quantitative easing, there's no reason to suspect that the US dollar will strengthen against anything, let alone the commodity currencies which of course will get a bump by traders jumping into the commodity markets in order to preserve wealth against a shrinking greenback.
Of course, it could work the other way.
That being said, there is the possibility that the markets look into the lack of global growth story. If that's case, there is a high chance that the markets will look into the lack of growth as a boost for the US dollar as it is a safety currency, and while that's possible I don't feel that ultimately will be the winning argument. That being said, it is something that could break his pair down a little bit farther.
Looking forward though, I think that the 0.80 level course will be supportive as well because of the large round number, so even if we break down I think you could be patient enough to wait for supportive candle in order to go long. On the other hand, shorter-term traders might be able to play both sides of the equation, but it never been a big fan of that as it is a good way to lose money in the end.
