The NZD/USD pair rose during the Tuesday session, as the New Zealand dollar continues to be a favor way to express a "risk on" attitude for currency traders around the world. However, we did see a bit of a fight at the 0.8250 level, an area that has given this market quite a bit of trouble over the last two weeks.
Looking forward, I think that the 0.83 level is what is really going to be difficult for this market across. I think eventually it will, but this is the resistance hurdle that we must get over in order for me to start buying this pair again.
One of the biggest hurdles for this pair beyond the technical analysis is the simple "risk on/risk off" attitude of the markets right now. The so-called "fiscal cliff” talks in the United States have a great influence on world markets in general, and it only takes one stupid comment out of a member of Congress to send the markets plummeting. We seen this recently and I'm afraid that we will see this again.
0.83
If we can get a daily close above the 0.83 level, I think that this would be the "go signal" for buyers in this market in order to continue higher. If we do get this, I won't hesitate to buy the New Zealand dollar, but the later we get in the month of December the less liquid the conditions will be. This is already a somewhat ill liquid pair to begin with, and the volatility that is typically seen at the end of the year could exacerbate is quite a bit.
However, I think that the bullishness will continue, and a deal out of Washington DC as far as the fiscal talks are concerned Woodson this pair skyrocketed. It would have commodities in general going well, and that is always good for the Kiwi dollar. Essentially, what happens in Wellington or Christchurch has nothing to do with how the currency will move, it simply going to be the political games being played in Washington DC.