Thursday, June 13, 2013

New Zealand dollar finds support

I wrote about hidden divergence in nzd/usd yesterday. Unfortunately a reversal did not take place. Well, there was some minor move down and I managed to grab a few pips, but I did expect a more profound move downwards. Looking from current perspective at most NZD pairs you can see that the currency has found support. Take a look at gbp/nzd, eur/nzd, nzd/chf or any other currency except nzd/jpy. All of them have found technical support and present bullish structures, which may mean that New Zealand dollar would deliver at least a short term swing and it could be a new opportunity for swing traders. 

As European currencies have been doing best against other major currencies I expect kiwi to outperform them most in the coming weeks. I would particularly concentrate on shorting gbp/nzd and eur/nzd pairs with a few long trades on nzd/usd pair just for the sake of diversification. And nzd/chf could be good for taking a few longs as it strongly correlates with eur/nzd. gbp/nzd will probably fall to 1.9000 level in a short period of time and eur/nzd will probably be at 1.6300 level very soon. Get ready for a few shorts in the pairs. I am waiting for confirmations on smaller time frames for my entries.