By FXEmpire.com
The NZD/USD pair ended up higher at the end of the session on Monday, as the oversold conditions finally had people stepping into the market as it has been so furiously sold off. The pair is a barometer of global risk, and the global risk is without a doubt pretty much dead at this point.
The various central banks around the world are looking likely to ease, and if this is the case it would make the commodity markets could get a solid bounce. Needless to say, the commodity markets will all rally if more easing comes, even if it is only for a short amount of time. The Kiwi dollar is highly correlated with a lot of futures markets, and this should be good for the health of this pair going forward.
However, we need to see this happen before a serious move will happen. Also, it is becoming more and more apparent that the easing and “sugar highs” that the markets have been getting over the last couple of years are becoming less and less effective, and we think that this moment could be a great time to sell the rally when it comes. However, it will need to see its surge first.
The 0.78 level above is still massively resistive, and we think that area would make a good spot to sell form on signs of weakness. The pair will be sold by us as well if we get a significant breakdown below the recent lows as it would show the entire idea of 0.75 giving way as support. This pair should continue the downward trajectory sooner or later, and as a result we are much more interested in selling than buying. The bounce that could be coming will be looked at as a chance to sell form higher levels, not a reason to buy.
The 0.78 level is especially interesting but we are willing to sell weak candles no matter where they come from as the negative headlines still threaten out there. When bad news comes out, the Kiwi is one of the pairs that move the fastest.
Click here a current NZD/USD Chart.
Originally posted here
