Forex Technical Update
NZD/USD Daily Chart 4:08PM EST 11/28/2012
Range, bullish momentum: The previous update observed the NZD/USD in a medium term consolidation range between roughly 0.81 and 0.8350. In the short-term, we have been rallying since mid-November as seen in the 4H chart. The Kiwi recently broke above 0.82 and thus broke above a short-term "inverted head and shoulder". The pattern here is not really in the correct context to be assessed as a reversal pattern, it is simply showing some short-term bottoming. Coincidentally, price also broke above the 200-HR SMA when completing this bottoming pattern. This week we had some corrective price action test the 200-SMA, as well as a projected rising trendline, and we saw a bounce. This "sling-shot" off the 200-SMA continues to confirm the bullish outlook toward 0.8350.The RSI shows that momentum is indeed developing to the upside with the reading holding above 40 in the 4H chart and tagging 70. Another push above 60 toward 70 will continue to confirm.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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