The NZD/USD pair fell during the majority of the session on Tuesday, but found the 0.82 level be supportive enough to push price back over it by the time the markets closed. Ultimately, this formed a nice looking hammer, and this of course is a nice signal for buyers. This market is still probably in a short-term trading type of market, and as a result I don't think that this market will go above the 0.8350 level, and certainly not above the 0.85 level anytime soon.
The New Zealand dollar of course is sensitive to commodities, and as a result the tapering, or lack of, by the Federal Reserve will of course have a great effect on the New Zealand dollar. If they do in fact taper off of quantitative easing, via the bond buyback program, this will drive up the value the US dollar, which more than likely will collapse this pair. On the other hand, if we do not taper, commodities could get a bit, and that will drive money into the New Zealand dollar as it is so sensitive.
Range bound
I still believe that we are stuck between the 0.82 level on the bottom, and the 0.85 level on the top. This 300 PIP range should be enough of a range for the shorter term trader to do quite well. Since we are at the absolute bottom of this range, if you are a little more aggressive you could probably go ahead and start buying here, simply because we do have a gap below that says of the 0.81 handle as well.
Keep in mind that this pair is going to be a bit choppy, so if you do go along at this point, and you will more than likely have a few tense moments here and there. However though, this is a nice binary trade in the sense that if we break down below the gap at the 0.81 handle, this market will collapse and really start to selloff so that you could recoup any losses that you had from going long.
