New Zealand Economy Does Not Support Lofty Price Levels

NZD USD traders have known for weeks that the current rally would notlast given the weak state of the New Zealand economy. Traders havefinally turned pessimistic after taking a realistic look at the weakeconomic fundamentals.

NZD USD traders have known for weeks that the current rally would not last given the weak state of the New Zealand economy. Traders have finally turned pessimistic after taking a realistic look at the weak economic fundamentals.

Investors are learning that this current rally has been driven by trader appetite for risk rather than sound economic reasons. This means that longs who bought the recent breakout to the upside may feel some pain if the global equity markets begin its long-awaited correction.

The current chart pattern suggests that the NZD USD is on pace to retrace to at least .5886 to .5730. At this point traders will have to take a look at the fundamentals once again to see if anything has changed.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

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