Thanks very much to Jack for pointing out the nice set-up here and this is a trade worth considering, more for the medium-term trader though rather than the intraday guys.
- The short-term chart (see chart) is showing a potential double-top at 1.7100 and resistance levels are now at 1.6950 (prior lows), 1.7000 (short-term bearish trend-line) and 1.7050 (hourly highs).
- The EZ situation is looking rocky again with spreads in the bond markets starting to widen again.
- The NZD has been dragged lower alongside the AUD but underlying real demand particularly from Chinese interests remains strong.
I don’t trade the NZD so I will not be trading this idea but it certainly does seem to have some merit. The downside targets are 1.6400 and possibly 1.5900 so the risk-reward outlook is excellent.