Potential signal:
- If the market rolls over, and breaks below 0.59, I would consider shorting, with a 60 pip stop loss, and a target of 0.58.
- The New Zealand dollar has risen against the US dollar, and the market is now reaching toward a resistance barrier.
NZD/USD
The New Zealand dollar has rallied against the US dollar as the US dollar has struggled against pretty much everything during the session on Wednesday after the Treasury Department announced it was going to nearly double its issuance of long-end bonds for roughly a month, as an effort to bring liquidity back into the market is at the forefront of officials' minds.
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With that being said, the 30-year yield dropped almost 9 basis points, which is a pretty big move in that world. That being said, the light data that is coming out this week puts a little bit more emphasis on the FOMC meeting minutes. It'll be interesting to see what they have to say at the last meeting, which does come out a little bit later.
New Zealand has a trade balance number coming out in Thursday morning Asia time, and the monetary policy statement for New Zealand is still 2 weeks out, so the calendar's pretty light.
Technical Resistance and Golden Cross Setup
Nonetheless, from a technical analysis standpoint, looking at the 0.5950 level as a bit of a barrier makes sense as it has been important multiple times. Recently, the 50-day EMA is starting to curl higher against the 200-day EMA, perhaps getting ready to kick off the so-called golden cross. That's a longer-term buy-and-hold type of signal, but at this juncture, as we head into a significant resistance barrier, it might be something that I ignore.
While this is a very positive day for the New Zealand dollar, it's just a continuation of what we had already seen, and as a result, it's not overly surprising. It was just a little quicker than one would have anticipated. As we head to the resistance, I'll be watching to see if we can break through, but as things stand right now, as I write this article, it looks like there might be a little bit of hesitation.
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