Another major currency that has been worth paying attention to over the past several months was the kiwi. During the last 20 days the currency gained almost 2%, and while last week it lost some of its value, this week New Zealand's currency has a great potential for further appreciation. On Wednesday the RBNZ will decide whether to start raising rates already or wait for a month or two. Keeping in mind Gov Wheeler's pledge to pull the trigger in the first half of 2014, as well as the expected increase in the trade surplus that will be out on Thursday, the NZD/USD pair can easily reach at least the lower boundary of the ascending triangle pattern (formed on January 14) and possibly hit a weekly R1 at 0.8314.
In contrast, Dukascopy traders are expecting a stronger U.S. Dollar this week, as 67% of traders are holding short positions on NZD/USD, while 54% of pending orders in a 100-pip range are placed to sell the pair. On the one hand, New Zealand economy is performing very well and the country is poised to become the first developed economy to start raising interest rates. On the other hand, , Ben Bernanke can rock the boat this week, as on Wednesday, January 29 the last FOMC meeting under his leadership is scheduled , as on January 31 he will be replaced by Janet Yellen. Despite the fact jobless claims and Q4 GDP are projected to deteriorate from the previous period, traders are buying the buck in 64% of all cases across the board. Last week the single currency was pushed higher by the stronger-than-expected manufacturing data from Europe, and amid lack of fundamental data from Europe this week, the most traded currency pair is expected to be driven by news from the world's largest economy. The pair seems to be reluctant to advance above 1.37, and keeping in mind possible hawkish comments from the Fed, the pair can inch lower to 1.3644, while the next key level for short traders can be found at a weekly S1 at 1.3550.