NZD/USD Technical Analysis October 11, 2011
The Kiwi dollar found itself being bid up during the Monday session as traders expressed relief that the Europeans have decided to agree on some unknown plan in the future to bail out banks. The absurdity of this statement is exactly what gets us so suspicious of any rally at this point, as there really hasn’t been anything fixed, yet the markets have reacted as such.
The NZD/USD is highly sensitive to economic conditions, and as a result rallied hard during the session. However, until there is some kind of concrete deal, it is going to be very hard to get overly bullish on the riskier assets as well as currencies like the Kiwi. The pair simply has too many things waiting to ambush it out there for us to be comfortable buying it.
The bounce from the 0.75 level has been impressive so far, and we even could see a continuation of the run up to the 0.80 level in the short-term. However, there really isn’t anything pushing this pair forward, other than some potential short-covering. Because of this, we are waiting to see if some kind of shooting star or bearish candle forms between the current level and 0.80 from which to sell.