NZD/USD is one of my favorite pairs to trade. It is a great expression of global risk appetite, and as a result it is quite often a “binary” set up when it comes to trading it. Simply put, if everyone is comfortable with taking a bit of risk, this pair rises over time. On the other hand, if there is a lot of fear in the markets, this pair is an easy short from which to make money. The fact that it is a less liquid market than the Aussie dollar makes the move you get in it larger most of the time as well.
The market in this pair tends to be very symmetrical as well, and this makes technical analysis much simpler than many of the other pairs out there in general. This may be because of the smaller market, meaning that if the large institutions are looking to sell at 0.80 – it actually can move the market. Many of the larger one will use these big numbers, and as a result this chart looks very orderly, and this is good.
0.80
The 0.80 level seems to be holding this pair back at the moment and this is what I am using for a “trigger point” in this pair. The 0.83 level above looks as if it is the top of the resistance level above, and as a result I think that the road ahead could be ugly for the bulls. Granted, I cannot rule out that we go higher, just that there is a lot of “noise” all the way up to the top. Because of this, I prefer to sell – not to mention all of the potential bad headlines that are out there waiting to happen.
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I see that the 0.78 level below is probably going to be supportive, and any fall form here will find support there, unless it is in response to some kind of panic. As a result, I am selling on a weak candle in the immediate area and aiming for 0.78 for a short-term trade.