NZD/USD Forecast September 7, 2012, Technical Analysis

By FX Empire Analyst - Christopher Lewis
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The NZD/USD pair rose during the session on Thursday, to break above the 0.80 level again. However, we have a nonfarm payroll number coming later today, and that will move the markets. Because of this we do not think that getting involved in this market currently is the smart thing to do. In fact, we have stopped right around the beginning of relatively strong resistance.

In fact, the best way to play the Kiwi dollar will be based upon the daily close. We think that's depending on which side of the resistance band we end up, we should just trade in that direction. We think that a move above the 0.81 handle is enough to start buying the Kiwi dollar as it should continue much higher. However, if we manage to close below the 0.80 handle, we think this is a very negative turn of events and should continue to punish the Kiwi further.

Much of this would have been predicated upon the idea of the European central bank buying bonds and "unlimited amounts", as the ECB announced during the Thursday session, but one has to wait for the details before they get too excited. This would not be the first time the markets got burned by what seemed to be very strong and positive European news. When it comes to letting down the traders of the world, nobody can compared to the European Central Bank.

We are still more aggressively short than long this pair, even with this impressive move. We feel in a lot of ways this may have been more of a short covering rally, especially when you compound the fact that the employment numbers out of the United States are coming out today. We also feel though, that the next 24 hours will be vital to direction of this pair.


NZD/USD Forecast September 7, 2012, Technical Analysis

NZD/USD Forecast September 7, 2012, Technical Analysis

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