The pick of the day is Kiwi, the forex geek name for the currency of New Zealand, and I’m going to analyze its moves against Ms. USA.
NZD/USD has been rather choppy over the last several months, but some traders have been gaining some pips on the relatively well-defined consolidation range.
The pair just tested to break a rectangle consolidation pattern on the daily chart at 0.80853, forming three black crows, which usually is a sign of a reversal so we could assume that this break was as false as it gets, and the pair may jump right back inside the rectangle, which at Invest Diva we call it the King of Consolidation.
The support is at 0.80853 and resistance at 0.84150. Another scenario is if Kiwi itself continues to consolidate but with the US dollar on the rise, Ms. USA could continue to drag the poor Kiwi down. This behavior can only be confirmed if the market opens below the support level on Monday.
It’s the last day of the week and the month to grab some pips on the forex dance floor! If you have open positions don’t forget to loosen up your stop and limit orders to avoid getting kicked out of your position based on a false market open jump on February 2.
Stay tuned for more technical updates and don’t forget to check in with the fundamental news and market sentiment as well, before you make a final trading decision!