Continuing with its recovery against other major currencies, the New-Zealand Dollar (NZD) extended its upward trajectory and is now headed for yet another week of gains. Investors now look forward to the Prelim US GDP print for Q4 of 2014 later during the day. Meanwhile, here is a technical update on EURNZD, NZDJPY and NZDCHF.
After recovering from sub-1.4800 level, all-time low touched in Jan. 2015, the pair reversed from 1.5800 odd important resistance level, comprising of 200-day SMA and 61.8% Fib. retracement level of Sept. 2014 to Jan. 2015 downfall. The pair is now headed for a fourth consecutive week of declines and is within striking distance of Jan. lows. A decisive break and close below 1.4800 mark would suggest continuation of the near-term weakening trend and could possibly extend towards 1.4150 level, marking 100% Fib. expansion level. Alternatively, should the pair manage to hold 1.4800 mark and start recovering, possibly indicating some buying interest at lower levels, it seems to immediately move back above 1.5000 mark to test 1.5040-50 immediate resistance area, which could further get extended till 38.2% Fib. retracement level resistance near 1.5400-20 area. Only a decisive strength above 1.5400 could possibly negate the short-term bearish outlook and the pair then could rally back towards testing 200-day SMA resistance, currently near 1.5700 level.
Following its drop during early Feb. to the lowest level since Oct. 2014, the pair witnessed a V-shaped recovery. The pair now has moved back above 200-day SMA and reclaimed 90.00 psychological mark. This 90.00 region, previous strong support, also coinciding with 50-day SMA and 61.8% Fib. retracement level of Dec. 2014 to early Feb. 2015 down-leg, now seems to provide some resistance. A sustained trade above this immediate resistance has the potential to further boost the pair towards its next horizontal resistance near 92.00 mark. Alternatively, reversal from current resistance level is likely to find support near 89.00 mark, representing 50% Fib. retracement level, and is closely followed by 200-day SMA support near 88.50 region. A decisive break back below 200-day SMA and a subsequent drop below 38.2% Fib. retracement level support near 88.00-87.80 zone, now seems trigger a fresh leg of weakness back towards 23.6% Fib. retracement level support near 86.00 mark.
Following a sharp downfall post SNB surprise decision, the pair has been steadily appreciating as depicted by formation of a short-term ascending channel on daily chart and has now moved closer to 0.7200 mark. From current levels the pair seems to make a fresh attempt to climb above 0.7200 mark and test 61.8% Fib. retracement level of the pair's big fall in Jan. A decisive strength above 61.8% Fib. retracement level resistance increases the possibilities of further up-move towards testing its previous strong support now turned resistance near 0.7450 level. Meanwhile on the downside, 0.7140 level is likely to protect immediate downside. This is closely followed by a strong support near 0.7050-40 area, coinciding with the lower trend-line support of the short-term ascending channel. A decisive break and close below the lower trend-line support seems to trigger further near-term weakness for the pair, initially towards 0.6900-0.6880 horizontal support and eventually towards 38.2% Fib. retracement level support near 0.6800 mark.
Senior Market Analyst
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