NZD/USD Forecast for the Week of December 26, 2011, Technical Analysis

NZD/USD rallied for the week as the 0.75 level attracted buyers again. This level seems to be key for the health of this pair going forward and should be watched very carefully. The pair is highly sensitive to risk in the markets, and as a result isn’t one of our favorites to buy at the moment. However, it is hard to sell at these lower levels for any real length of time. The highs are getting lower, so we know we want to sell – but are looking for rallies to fade on a short term basis, making the trading of this pair difficult for longer term traders. We see a ton of support all the way from 0.75 to 0.70 in this pair, further complicating the longer term trade in the Kiwi dollar presently.