NZD/USD Technical Analysis October 13, 2011

The NZD/USD pair had a strong day on Wednesday as traders bought any and everything risk-related. The Kiwi is highly correlated with global risk, and the happiness around the globe got the Kiwi market excited. However, the pair did fall and fail at the all-important 0.80 level. This level was a spot where we told you the pair would have to prove itself, and until we can stay above it on a close, we aren’t willing to buy this pair. The daily candle is impressive, as it is long and green – but it still struggled at this all-important area.

We are buying on a daily close above that mark, but aren’t willing to do anything with it form the buy side until then. Shorter time frames actually suggest that the next move could be to the downside, and this would be a continuation of the down trend that we have seen recently. We are willing to put on a short position at this point, as the stops could be tight and just above the 0.8000 mark.