NZD/USD Technical Analysis for the Week of October 24, 2011

NZD/USD had a bullish day on Friday and broke back above the 0.8000 level as traders felt the need to go “risk on” as the EU meeting was being held on Sunday. The Kiwi is very sensitive to the risk appetite around the world, so this wasn’t a big surprise. However, the weekly chart looks very interesting as the candle looks like a hammer, but at the top of the range. These can either be a launching point for another rally, or a “hanging man”, which is massive bearish. If the range gets broken to the upside, it should be in response to a massive “risk on” situation in the markets. If the bottom of the hammer gets broken through – that is a massively bearish signal.