NZD/USD Forecast October 17, 2012, Technical Analysis

The NZD/USD pair fell during most of the session on Tuesday, but found a bounce off of the 0.81 handle. This movement caused a hammer for the day, and it certainly suggests that we are going to see bullishness going forward. With the world stock markets doing quite well during the session, it would make sense that the New Zealand dollar would gain as well. As long as we are in a “risk on” type of environment, the Kiwi dollar will do well.

We see this as a potential move back to the 0.83 handle, and would start buying above the 0.82 handle. As for selling, we need to break down below the lows of the hammer from Tuesday which would essentially be the 0.81 handle, and then that would put us down to 0.79. It’s a fairly straightforward and binary type of trade, and this is exactly the type chart we like.