By FXEmpire.com
The NZD/USD pair initially fell during the Monday session, but bounce off of the Friday highs in order to form a hammer for the session. Unfortunately, the hammer sits just under the 0.80 level which of course is massive resistance. In fact, we see resistance all the way to 0.8050 and slightly above.
With this in mind, we feel that this pair will be the one to watch during the Federal Reserve Chairman’s testimony in front of Congress today. If the Chairman gives any hint of quantitative easing, this pair should rise as the Kiwi dollar is so tied to the commodity markets. On a move above the 0.8065 level, we would go ahead and buy this pair.
However, it is more likely that the surprise move would be to the downside. This would be predicated on the fact that he doesn’t mention anything involving quantitative easing, and this would be of the negative type of news when it comes to commodity currencies. This should send this pair down to the 0.79 handle, if not the 0.78. Anything below the 0.78 would be massively bearish, and have us aggressively selling this pair.
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Originally posted here
