Kiwi Drifting Between Two Key Levels
By admin | May 29, 2011
On Wednesday, we outlined recent NZD outperformance relative to its G10 peers as well as the potential for further gains in NZD/USD on a break above 0.8020/25 inverted H&S neckline resistance.
On Thursday, NZD/USD traded to highs around 0.8120/25 boosted by sources stating of an impending NZD6bn investment in NZ debt & equity markets alongside broader USD weakness.
Here we are Friday and NZD/USD came within pips of printing fresh record highs above the 2008 highs around 0.8210/15, also around the measured move objective for the inverted H&S pattern we highlighted Wednesday. Taking partial profits at current levels and setting trailing stops to cost for the remaining position seems wise, however, as the pair has sharply reversed and looks set to close below the recently supportive 21-hr sma. While the longer term outlook in NZD/USD still looks constructive, future pullbacks are likely to provide better value for re-establishing long positions if prices fall back down to prior neckline resistance and now support.
Will return with future updates, until then we hope everyone enjoys a fun and safe Memorial Day weekend.
