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    NZD/USD challenges 200-day SMA

    © Dukascopy Bank SA
    "I'd still be pretty skeptical of the recovery we've seen in commodity currencies as oil prices are probably going to head lower and there's downside risk for other commodities."
    - Jason Wong, Bank of New Zealand (based on Bloomberg)

    Pair's Outlook
    In hindsight, it is now clear that instead of a channel NZD/USD was in fact forming an ascending triangle, which usually portends a rally. Yesterday, the pair breached both the 55 and 100-day SMAs, but there are still more than enough resistances to prevent further appreciation of the Kiwi. The immediate level is the 200-day SMA at 0.6714, followed by a combination of the falling resistance line and the monthly R1 level at 0.6760. A close above 0.6760 will imply a test of the October high at 69 cents.

    Traders' Sentiment
    The market is in near perfect equilibrium—52% of open positions are long and 48% are short. As for the sell orders 100 pips around the spot price, their share declined from 81 to 47%.

    © Dukascopy Bank SA

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