25 Sep 2013
NZD/USD completes cup and handle; a bull reversal?
FXstreet.com (London) - NZD/USD had made a run off from the lows at 0.8217 and found supply coming in at 0.8270, forming a cup and handle on the hourly charts.
The main theme to the bird is the RBNZ. Rationale being the RBNZ is likely to become increasingly vocal on NZD strength. On the other hand, the debt ceiling in the US and deadline is a black cloud over the dollar as it closes in and that will keep a cap on the dollar for now. Jane Foley, strategist at Rabobank notes the concerns over the budget from the US and implications on the dollar. She said, “Any shutdown of the government this autumn would intensify this pressure on economic activity and could provide a fresh reason for the Fed to delay any tapering of QE. This combination is clearly USD negative and should therefore be sufficient to offset an increase in safe haven demand for the currency”.
NZD/USD Levels
The cup and handle formation offers a bullish signal and shift from the downward trend for the pair while the key level on the downside is the 200dma at 0.8179 (notable pivot on way up). The 20 DMA is 0.8065, the 50 DMA is 0.7998. RSI (14) 45.11. Supports are ascending from 0.8130, 0.8165, 0.8190, 0.8206, 0.8228. Spot is currently 0.8244 while resistances are 0.8297, 0.8320, 0.8341 and 0.8374.
The main theme to the bird is the RBNZ. Rationale being the RBNZ is likely to become increasingly vocal on NZD strength. On the other hand, the debt ceiling in the US and deadline is a black cloud over the dollar as it closes in and that will keep a cap on the dollar for now. Jane Foley, strategist at Rabobank notes the concerns over the budget from the US and implications on the dollar. She said, “Any shutdown of the government this autumn would intensify this pressure on economic activity and could provide a fresh reason for the Fed to delay any tapering of QE. This combination is clearly USD negative and should therefore be sufficient to offset an increase in safe haven demand for the currency”.
NZD/USD Levels
The cup and handle formation offers a bullish signal and shift from the downward trend for the pair while the key level on the downside is the 200dma at 0.8179 (notable pivot on way up). The 20 DMA is 0.8065, the 50 DMA is 0.7998. RSI (14) 45.11. Supports are ascending from 0.8130, 0.8165, 0.8190, 0.8206, 0.8228. Spot is currently 0.8244 while resistances are 0.8297, 0.8320, 0.8341 and 0.8374.