The New Zealand dollars rebounded vs. the dollar as a rise in U.S. stocks gave investors confidence to increase holdings of higher-yielding assets. The currencies, favorites for so-called carry trades, rose as the Standard & Poor's 500 Index recovered from the worst two- day loss since 2003. ``The Aussie and kiwi staged the swiftest correction,'' said Tony Morriss, a currency strategist at Australia & New Zealand Banking Group Ltd. in Sydney, using the currencies' nicknames. ``They are likely to head higher as the equity markets find their feet and carry trades rebound.'' New Zealand's official cash rate, at 8.25 percent, is the highest after Iceland's among countries with the top rating at Moody's Investors Service.

The following technical analysis gives us a detailed lookout on what is expected to happen to the pair.

The buying point of NZD/USD is at 0.7725; based on a strong support and a failure of making lower then the previous support at 0.7550.

-Fibonacci retracement 38.2% is the first target taking profit at 0.7762
- Fibonacci retracement 50.0% is the Second target taking profit at 0.7828
- Previous support will be the stop loss at 0.7549

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. In order to find the power of the market, we use RSI (Relative Strength Index). In this example RSI is clear uptrend.

The momentum oscillator is very important to understand the strength of the market and as we see on the graph; it break the zero line. The Stochastic oscillator breaks 20% line and moving upwards. Most of the indicators show us the strength of the NZD dollars against the US dollars.

* 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