Hi guys, my forex pick is the NZDUSD pair (New Zealand dollar vs US dollar) or “kiwi” as some may call it. This currency had been going up since May of this year but after making a 2-year high of 0.7976 last November, it started dropping. Right now, I’m bearish on this currency pair as it could break down from a head and shoulders formation in the daily chart with the neckline at 0.7400. Also, the MACD is currently moving below zero which further indicates a sell signal. If the pair breaks down from the said pattern moving pass below the 0.7400 marker, it could land on the next support at 0.7200. If 0.7200 could not hold the New Zealand Dollar, the next support could be 0.7000. On the flip side, if the pair bounces from the neckline and continues the uptrend, it could find some resistance at 0.7674. Once that gets cleared out, the next resistance could be 0.7800. Although the “kiwi” is showing signs of falling, the uptrend is still intact.
Moments earlier, the Reserve Bank of New Zealand (RBNZ) decided to maintain its official cash rate at 3.00% which caused the currency to drop by 50 pips right after the release. I was expecting that maintaining the cash rate at that number would give the New Zealand dollar a better edge against the greenback. However, in my opinion, with the current indecisiveness of the global markets because of possible debt crisis of more European countries, the ongoing tension between North and South Korea and president Obama’s proposal to extend tax cut in the US, people hardly find security on placing their money in other currencies but the US dollar.