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NZD: Kiwi is challenging key ultra−long term resistance around 0.7500

Nicole Elliott from Mizuho Corporate Bank at 01/13/10


Comment: After the stellar rally since March, once again the Kiwi is challenging key ultra-long term resistance around 0.7500. More impressive still is the fact that over the last three months pullbacks have been shallow and take the shape of a potential ‘flag’ formation. December’s close just above 0.7200 has kept momentum bullish and this should increase on a weekly close above 0.7450. This in turn should set off a re-test of the psychological 0.8000 and then the all-time high at 0.8213. Note that one-month at-the-money implied volatility is close to its long term average at 13.00%.

A weekly close below 0.7000 forces us to adjust.

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