Finotec News Archive - August 30 2007
Will New Zealand dollar stay above 70 U.S cents?
The New Zealand dollar struggled to stay above 70 U.S cents on Thursday as broader market concerns about risky investments overshadowed a flurry of domestic data. The kiwi briefly attained the $0.7100 level early in the session on the back of firme
Will New Zealand dollar stay above 70 U.S cents?Anthony Boyajian 
30 August 2007
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The New Zealand dollar struggled to stay above 70 U.S cents on Thursday as broader market concerns about risky investments overshadowed a flurry of domestic data.
The kiwi briefly attained the $0.7100 level early in the session on the back of firmer stock markets, but then lost ground through the day as risk aversion returned.
"The kiwi wasn't as perky as expected. The sharp rally in U.S. equities and with Asian equities stronger today -- that improved sentiment didn't flow through into currencies," said Westpac currency strategist Michael Gordon.
Gordon said the kiwi was more influenced by the yen, which has gained as investors remained wary about getting back into risky investments, which have been financed by borrowing the low yielding Japanese currency.
The following technical analysis gives us a detailed lookout on what is expected to happen to NZD/USD.
The buying point is at 0.7004; based on a bounce of Standard Error Channel
- Fibonacci retracement 61.8% is the take profit at 0.7121
- Fibonacci retracement 23.6% will be the stop loss at 0.6960
The selling point is at 0.6906; based on a break of strong support
- Previous support is the take profit at 0.6770
- Fibonacci retracement 38.2% is the stop Loss at 0.7025
To strengthen our analysis; we use many other indicators, starting with MACD (Moving Averages convergence divergence); we notice the crossing of the two moving averages below the zero line, the shorter term moving average is faster than the long term and is pointing upwards with break of zero line. In order to find the power of the market, we use RSI (Relative Strength Index).With RSI, we can determine that the market is in a bullish direction with break of 30% line.
The momentum oscillator is very important to understand the strength of the market and as we see on the graph; it bounce on the zero line and moving upwards. The Stochastic oscillator breaks 20% line and continues to go higher.
* The following analysis is for information only; Finotec is not responsible for any
decisions or misinterpretations based on the given text.
By Finotec’s professional analyst,
Tony B.
dealingdesk@finotec.com
Finotec Analysis Team
30 August 2007
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