Around 267 pips from bottom to top isn’t a bad days work now is it?
It’s hard to talk a currency down when you’re in a rate raising phase, and just from reading Eamonn’s coverage last night the talking seemed almost half hearted. It was no shock to see the pair trading at 0.86 when I awoke but it wasn’t done there and has tacked on another 85 pips.
NZD/USD weekly chart 12 06 2014
The bid bias from rate action didn’t take us too far from the years highs between here and 0.8776 and we’re troubling that area again. That 2007 high around 0.8840 marks the highest point for over 30 years and if we get a break there’s not a lot in the way to the 0.90’s and beyond.
NZD/USD monthly chart 12 06 2014
I should imagine that if we approach 0.90 the RBNZ will start to ramp up the talk about the currency, but with at least two more rate hikes expected, they’ll have a tough job just using words against the currency.
I’m tempted by a short if we try 0.87 today as that looks a good stretch point for this move. If we stay elevated near the level for a few sessions then my interest will cool as that’s likely to point to strength building up below.
Support wise the 0.8582 and July 2007 resistance line was washed away on the run up but they may have a say if we come back down. The 55 dma is also around there at 0.8588.
On the other side of the coin it’s cratered my AUD/NZD position but I’m not overly concerned with that at this moment.