The NZD/USD rose during the session on Wednesday as the hammer from Tuesday got triggered as a buy signal. This pair of course follows the overall “risk appetite” of investors, and as all things “risky” got a bid on the session, this pair did well.
The 0.8100 level looks to be supportive going forward, and because of this I think this pair is going to at the very least consolidate between the 0.81 and 0.83 levels. The breaking above the 0.83 level on a daily close would be massively bullish for the buyers, and it looks as if this is going to happen sooner or later. With the Federal Reserve looking to kill the US dollar, this isn’t exactly a surprise in my opinion. As commodities go, so will the Kiwi dollar after all.
The 0.80 below should offer support if we break down for some reason. However, I am not looking for this to happen, and think it is the least likely of all scenarios. I would suggest that if the markets disappoint somehow, we will more than likely go sideways if anything else.
Stair stepping
If you look at the last several months, it appears that the pair has been stair stepping more than anything else. It appears that we are ready to go higher in order to build the next “step”, and as a result this will offer a buying opportunity. The commodity markets will have to move along with us, and the Spanish asking for a bailout would have them rocking as the relief of traders would have them taking risks all along the spectrum of financial instruments.
Also, the Australians are said to be ready to cut rates twice over the next six months. In this sense, the Kiwi will be the more attractive of the two as although they move in the same way, this pair should have more pep to it when it goes higher as it doesn’t have that stigma attached to it. With this in mind, I am buying the Kiwi dollar in order to prepare for the next leg higher.