Short Kiwi? (2011-07-29 NZD analysis)

Out of my expectation, the data announced was surprisingly quite positive. Most stock indexes were stable and HSI broke the first down-trend resistant. The next resistance is at around 22,750.

Today I will talk a bit on Forex.

4-Hour chart of New Zealand Dollar (NZD):


NZD has been moving along the red upwards channel for two weeks, and just broke the lower up-trend line to a lower level.

Besides the red channel, 20-day Simple Moving Average well supported New Zealand Dollar several times, but was not able to do so yesterday.

The break down means a change in general trend from bullish to bearish. Next support should be the 50-day Simple Moving Average which is at around 0.864, but its relatively weak.

And then by identifying more trend-lines, I found strong support at 0.85, and ultimate support will be at around 0.82 (currently, it is rising obviously).

It is a good time to short kiwi. Even there might be some rebound at 50-day SMA, the trend has changed and it is quite likely to drop to 0.85.