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Talking Points
- Fails at key symmetry
- Timing later this month potentially pivotal
NZD/USD and the Importance of the Next Few Weeks
I have been focused on late this month/early May as the next real big timing test for NZD/USD. Ideally I would like to see the exchange rate continue higher into that time frame and the broader downtrend to reassert itself then, but markets rarely give us exactly what we want so I am open minded here. As the chart above shows, the Kiwi failed at a pretty interesting level last week as the double highs from March 31 and April 1 came right at the median line of an Andrews pitchfork drawn from the April 2011 high (through the 2013 low and the 2014 high). If we get continued weakness from here it could very well set up a secondary low of some kind into my turn date around the start of next month.
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I think the big downside pivot to watch over the next few weeks is probably going to be the lower parallel of an Andrews pitchfork drawn from the August spike low. This level proved to be important support around the middle of last month and a clear breach of it would warn of a more serious change in behavior heading into the turn window. It currently comes into play around .6670. If spot can hold above it then I like the chances of getting some sort of high in a few weeks time. Below it and a low of is probably in the cards.
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--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
To contact Kristian, e-mail instructor@dailyfx.com. Follow me on Twitter @KKerrFX
