Most major foreign currencies have strengthened against the US dollar in the last month but the New Zealand dollar (NZD) should continue to be the strongest performer, says Cornelius Luca, Global Chief Technical Analyst at Thomson Reuters.
Luca points out that NZD/USD has accelerated its recovery from a 6+ year low via a complex triple bottom to reach a 2.5 month high this month. The pair is trading well above its 21-day exponential moving average and both MACD and fast stochastics are bullish (see Chart). As such, Luca suggests going long NZD while it remains above its 10-day exponential moving average.
Initial support is at 0.6590 with further support at 0.6455. Initial resistance is at 0.6810 with further resistance at 0.6847.