NZD/USD Forecast December 6, 2012, Technical Analysis

The NZD/USD pair rose during the session and closed at the very highs. This is a very bullish sign in a very risk sensitive currency pair. However, we closed just below the 0.83 handle, and as such we are not technically broken out yet. We still see the 0.83 level as a serious barrier for the buyers to overcome, but if they do we should hit the 0.85 level shortly thereafter.

As for selling, it’s not even the thought at this point in time and will not be until we break down below the 0.80 level. We think that this pair will continue to be choppy and headline driven, so selling would certainly be dangerous. We think the momentum is starting to build on the upside as if the market is expecting some type of bargain coming out of Washington DC with the fiscal talks, and as such we could see extreme volatility. Overall though, if we had to take a trade it would certainly be to the upside.