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Traders Lighten Up in NZD/USD; Await Interest Rate Decision

By:   James Hyerczyk
  • 20-07-2008
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Weekly Recap

The NZD/USD is facing downside pressure as traders await the next interest rate decision from the Reserve Bank of New Zealand.

Forecasts are for the central bank to leave rates unchanged.

Early in the week U.S. traders continued to buy the Kiwi because of the high yield, but quickly turned into sellers when the U.S. stock market offered better than expected rewards.

Technicals

Technically, the main trend on the weekly chart is down.

Based on the short-term range of .7921 to .7445, the market traded into a resistance zone at .7683 to .7739, where it ran into sellers.

The actual high for the week was .7761.  The lower close for the week sets up a further decline next week with a downside objective of a major 50% price at .7427.

Old bottoms at .7383 and .7365 are also potential targets especially if the central bank surprises everyone with a rate cut.


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Next Analysis: USD remains handcuffed in a range with another relatively quiet economic calendar week ahead.
Content Provided by:
James Hyerczyk

James A. Hyerczyk is a registered Commodity Trading Advisor with the National Futures Association.

Mr. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor.


DISCLAIMER:
Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. The value of currencies may fluctuate and investors may lose all or more than their original investments. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from James A. Hyerczyk and J.A.H. Research and Trading or its subsidiaries and/or affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of positions such as "spread" or "straddle" trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.


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