The NZDUSD has broken below a trendline that had held price since June 2006. A longer term support line is near .71. There is no change to the longer term call for a drop below .5927.
The long term count is tracking well. The line drawn off of the June 2006 and August 2007 lows has been broken, which supports the bearish count and our call for price to eventually fall below .5927. The next level of potential support is the long term trendline, drawn off of the September 2001 and June 2006 lows, near .71 over the next few weeks.
As of now, price should remain below .7467 but there is no change to the longer term bearish bias as long as price is below .7761. Objectives are at .6990 and .6823. Reinforcing the bearish bias is today’s break below the trendline that had held since June 2006.
To contact Jamie regarding this or other articles he has authored, please email him at jsaettele@fxcm.com
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The rapid deterioration of the New Zealand economy is prompting many investors to exit the so called carry trades despite the country’s high level of interest rate. Indeed, the New Zealand dollar has been falling sharply against the world’s most heavily traded currencies on speculation that the Reserve Bank of New Zealand could have to cut interest rates faster than traders had previously expected.
Read our special report on the New Zealand economy to learn more!
