NZD/USD (last 0.7194) is likely to trade with a positive bias this week as the daily MACD and stochastic indictors are bullish, although the latter is at the overbought level. Resistance is at the 0.7243, the previous base set Aug. 5; a breach would expose the upside to the Aug. 4 reaction high of 0.7356. An extension of the rise would target 0.7395, the six-month high when hit July 27. Support is at Friday's low of 0.7126, currently matching the 55-day moving average; a breach would temper the near-term positive outlook, targeting Thursday's low of 0.7093, now near the 200-day moving average; and then Tuesday's reaction low of 0.6962. An extension of the fall would target the Aug. 25 reaction low of 0.6944. NZD/USD may consolidate over the next few weeks as the five- and 15-week moving averages are meandering sideways. A rise above the 0.7395 resistance would tilt the medium-term outlook toward positive, opening the way up to the Oct. 21, 2009 high of 0.7634, and then to the Feb. 27, 2008 post-float high of 0.8213. But a fall below the 0.6944 support would expose the downside to the July 1 reaction low of 0.6791, and then to 0.6559, the May 25 trough.
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