You know how you can get pretty satisfied in your comfort zone (no matter how low it is) and just don’t feel like getting out of it? Moving is hard! Not only for humans (believe me, I experienced it once again yesterday and it’s no fun) but apparently also for most currencies on the forex dance floor.
Particularly for Mr. Euro, Ms. USA and Mr. Japanese Yen who can’t be bothered no matter what they hear from the politicians of their country.
There are some currencies however who finally seem like they are showing a green light to getting down to business of trendy dancing on the forex dance floor. I’m talking about the guys from Down Under, Mr.s Aussie and Mr. Kiwi.
Today I’m gonna focus on Mr. Kiwi as he dances against Ms. USA, aka the NZD/USD pair.
The moving and shaking in Mr. Kiwi began after more than a year of talking down Mr. New Zealand dollar, helping push him to the weakest since 2011, the Reserve Bank of New Zealand (RBNZ) governor Wheeler undermined those efforts on Feb. 4 by saying he doesn’t expect to cut interest rates. Traders got these words as a sign, sending Kiwi up 3.8 percent this month to make it the best-performing major currency.
We got a bit more up- moves last night when the Gov called for more to be done to remove height restrictions on inner Auckland apartment buildings and a swipe at ‘Not In My Backyard’ types in the inner suburbs that have blocked new developments.
On the daily dance floor while the NZD/USD pair remains below the Ichimoku cloud, we have observed a BUY Signal with the Tenkan line crossing above the Kijun line, as well as a Bullish Engulfing Candlestick pattern formation which is helping the pair approaching the 23% Fibonacci level with a higher bullish sentiment.
The Speculative Sentiment Index shows that only 41% of market participants in one of the largest forex trading platforms are long Mr. Kiwi and using this signal as a contrarian indication, the combination of current sentiment and recent changes gives a further bullish trading bias.
As such, I’m planning to enter a long position with one the pair confirms above the 23% Fibonacci level at 0.76 with targets at 0.7830 and 0.80 in extension. I’ll be setting my stop loss orders at current support levels at 0.7350 and 0.7238.
What do you think will happen to Mr. Kiwi?