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NZD/USD has been narrowing its trading range and formed a Triangle pattern on the 1D chart. The pattern has 87% quality and 100% magnitude in the 381-bar period.
The pattern started on the 1st of August, 2011, when the pair rebounded from 0.8844 and after testing pattern's support levels at 0.7371 on 25th of November, 2011, and at 0.7456 on 1st of June, 2012, it has slowed down next to SMA200 level at 0.7950. where the pair is currently trading. Pattern's support and resistance bands are set to intersect at 0.7630 on 25th of March, 2013. The SWFX market sentiment is equally divided between bulls and bears. Long traders, expecting that the pair will resume its movement towards patterns resistance band, could focus on the 5th of July high at 0.8076. If the pair breaches this level next target could be set at the pattern's resistance band at 0.8160.
Technical indicators on aggregate point at a bearish market development on the 1W and time horizons indicating that SMA200 most likely is a strong resistance level for the pair. Short traders could focus on the 12th of July low at 0.7862. If this level is breached, next target could be at 0.7800 due to momentum pair gained after breaching this level on 14th of May and June.
Traders should pay attention to the Reserve Bank of New Zealand rate statement and official cash rate announcements on 25th of July and a vast amount of weekly and monthly data from the US coming out almost every day. In addition, interlink between Australian and New Zealand economies and how prices of commodities influence NZD should be taken into consideration.
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