A break above the June resistance line in September saw the pair reach the lofty heights of the 0.85’s and the broken line has acted as support on a couple of occasions since. At today’s money the line comes in at 0.8193 but just ahead of it we have the 55 dma at 0.8209 and the 55 wma at 0.8199.
NZD/USD daily chart 08 11 2013
Also in close proximity we have the 200 dma at 0.8175 and an area of previous resistance at 0.8160. For all you hunchback aficionados the looks to be a H&S formation completing as well.
With the RBNZ promoting rate hikes in 2014 the focus will be getting on the rate rise train. There is still a way to go so there’s plenty that can happen in between and so it’s important to realise the potential “start” point where rate hikes will begin to get priced in. If the USD has it’s way we could be much lower than here before that happens.
I like the potential to trade on the rate decisions and so building into longs on key levels makes sense. I’ll be looking to take a long position against that clutch of support levels and I’ll be prepared to buy it all the way down to the March 2011 support and 2013 lows for the long term. I’ll also be taking advantage of any bounces from that support to book some profits while maintaining a core long.
