The NZD/USD pair had a relatively weak Christmas Eve session on Monday, but all things being equal, you must remember that there was simply no volume. Because of this, there is it too much you can read out of the session but we can look at the totality of the chart and garner a few ideas.
Looking at the past two weeks, you can see that this pair has had quite a wild ride. This can be directly related and traced to the attitude about the so-called "fiscal cliff” situation in the United States. After all, the New Zealand dollar is one of the more aggressive "risk on" currencies out there. It has the liquidity to be safe enough to trade, but it does lack some of the liquidity that you will see in some of the other major pairs. This is part of what makes it move rather quickly.
Congress and the President
Ironically, this pair will be dictated by what goes on in Washington DC, and not Wellington. Even with the Federal Reserve promising to buy more assets for who knows how long, the risk appetite around the world right now is relatively subdued. This is mainly because of the talks going on between the U.S. Congress and President Obama involving the “fiscal cliff.” This never-ending conversation is more about politics at this point, and much less about actually fixing anything economically related.
The markets are starting to lose their patience with these people, and as a result the "risk on" financial instruments will suffer. Simply put, investors do not want to risk their assets and it completely uncertain environment. However, these people someday we'll get a solution going as is simply too important, and at that point in time we would fully expect riskier currencies to gain rapidly. Without a doubt, the New Zealand dollar would probably be one of the most stellar performers in that particular scenario.
In the meantime I do not suggest selling this pair as I see far too many minor support areas below. In fact, you can almost make an argument for a big huge thick "zone" going all the way to the 0.80 handle. With that in mind, it simply going to be far too difficult to short the Kiwi dollar, and much easier to simply wait for either good news out of Washington DC, or some type of supportive candle just below.