NZD USD Hits Monthly Gann Angle at .7455

Overnight the NZD USD surged to a new 15-month high following a reportthat showed a better-than-expected inflation number. Speculators arenow increasing bets that the Reserve Bank of New Zealand will raise itsbenchmark interest rate sooner than expected.

Daily Analysis

NZD USD

Overnight the NZD USD surged to a new 15-month high following a report that showed a better-than-expected inflation number. Speculators are now increasing bets that the Reserve Bank of New Zealand will raise its benchmark interest rate sooner than expected.

Following its September meeting, the RBNZ indicated that it was on track to begin raising rates in late 2010, but recent economic improvements now have central bank watchers talking about a rate hike perhaps as early as last month.

Recent comments from an RBNZ official indicate that concerns are mounting that the rapid rise in the currency may become detrimental to New Zealand’s economic recovery. Traders will be watching carefully as to what action the RBNZ may take to combat over speculation in its currency. This would include cutting off access to low-interest government loans, reducing stimulus or even an intervention.

Technically, the New Zealand Dollar is in an uptrend with no sign of a change in trend. The best sign of a top will be a weekly closing price reversal, but the earliest indication of a top will be a reversal to the down side on the daily chart.

The monthly chart indicates the market hit a Gann angle target at .7455. Watch for a possible down side reaction at this price. Although the angle was reached, there has to be price action which indicates selling pressure before considering shorting at this level. Support is being supplied by an uptrending angle on the monthly chart at .7132. A break through this level will indicate the trend is turning to down.

Daily Chart

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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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