NZD/USD: technical update
Last week NZD/USD formed a long “bullish engulfing” candle, soaring by more than 200 pips, but the rally was capped at $0.8135. Technically, the pair has room for more growth, but this week traders show uncertainty ahead of the today’s Fed meeting. On Wednesday, right before the policy announcement, kiwi recovered back above $0.8000 following a dip to $0.7950.
Analysts at Westpac expect the pair to correct to the $0.8100/8200 area during the next week or two. However, in a longer term they remain bearish as speculative long positions need to be unwound further. In their view, economic data momentum should slow during the next few months.
Resistance: $0.8100/10 (38.2% Fibo from the recent drop), $0.8140, $0.8200/15 (50% Fibo)
Support: $0.8000, $0.7975 (23.6% Fibo), $0.7945
Watch the FOMC policy announcement at 18:00 GMT and Bernanke’s press conference at 18:30 GMT. Later in the day pay attention to New Zealand’s Q1 GDP (22:45 GMT).
Chart. Daily NZD/USD