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NZD continues bullish run

Article by ForexTime

The New Zealand dollar continues to fly high against the greenback over the last two weeks, with the bulls looking to really take control. It’s not really a big surprise given the NZD likes to have big swings against the USD, but there are some underlying reasons for it. Firstly the economy has been doing quite strong with recent trade balance figures coming in at 578M (267M exp) surprising many analysts in the market. Secondly, the NZ government continues to show fiscal responsibility and work alongside an independent central bank in order to help the economy as best as possible. And finally the housing bubble that for so long looked to be causing issues and was a threat for the economy is slowly getting the air drained out of it as house prices and sales look to stabilise in some of the busiest areas. All of this has contributed thus far to the NZD’s favouritism with the market. Traditionally, the NZD has been one for the fixed income traders, and with the Australian economy struggling as of late, it’s clear to see which one they are favouring.

For the technical trader bullish runs don’t get much stronger, with the NZDUSD pushing through key levels at 0.6945 and 0.7124. The bounce off 0.7124 and penetration of the 100 day moving average and treating it like support was also another strong signal to the market for the NZDUSD. Traders will now be looking to aim high and see how far they can push the NZDUSD and likely resistance targets can be found around 0.7124 and the infamous psychological level at 0.7200. Above this level we may find some bearish activity on the daily chart, as the current waves have a bearish theme and each one thus far has been weaker. So this could be the point that the market does indeed look to turn lower.

With all the movement in oil markets and the USD market the Canadian economy has been having a bit of a rough time, but it’s certainly not all darkness and one of the positives has been the USDCAD moving with some purpose compared to previous months. Trending markets are always ideal, but for a long time the USDCAD was jumping between levels and showing no interesting in finding some direction. However, recently the bears have crept back into the USDCAD and it has started trending strongly downwards.

For myself I am looking for two things here, if the USDCAD can go lower and touch the bullish trend line that has been in play for some time. Or alternatively, look to drop lower and form up a second shoulder which could see a head and shoulders pattern forming. The latter looks less likely and the trend line will be the key focus I feel for a number of traders. Movements lower could also intersect with the trend line and support at 1.3262 which is a key focus for traders looking to exit the market.

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.


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About Louie Lewis

Louie Lewis
Successful forex trading starts with you first. Then comes the actual strategies and techniques. I have been involved with forex and forex trading for a few years now. It is a wonderful way to build wealth. The learning never stops and I want to help others along their journey into this wonderful market of opportunity.

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