Hope you all enjoyed the Christmas break and are ready for another year of thrashing the markets.
NZD/USD is currently looking extremely for the following reasons:
- Break of the neckline of the , implying downside movement to 0.66150;
- Break of the support from Jan to June lows;
- Break of the 200dma.
and recent price action suggest that a pullback is imminent. I suggest shorting this pair at 0.70047 (. of 14-22nd Dec move) and adding further damage if we see a retest of the support.
This is a technical play at heart, although various fundamental factors including broad US$ strength during 2017 (see related idea), the commodity bloc currencies' position of vulnerability to worsening yield differentials vis a vis the USD and the propensity for loss of ground if the risk environment begins to deteriorate favour n/u shorts.