Forex: NZD/USD prints highest since Sept 2011

Following a 35 pips upside gap in early Asian trade to 0.8481, highest level seen since September 2011, the NZD/USD has found dip buyers once again after almost closing its gap. Session low at 0.8447 vs 0.8442 NY close.

Going forward, the next big target for emerging buyers will be the 0.8500, with sizeable stops probably hiding above. An eventual upside resolution may set the stage for an attack towards 0.8570 territory, Sept 2011 high. Traders should also note that heavy selling pressure on the AUD/NZD cross is an element underpinning the price action in NZD/USD.

The upward pressure on prices is evident from several timeframes. On the 4 hour chart, a triangle formation is identified since December, while on the weekly timeframe, a clear squeeze of shorts with price printing higher highs and higher lows since 0.75 rebound on May 2012 can be observed. Note the 20-weekly EMA is also acting as a reliable support for prices, indication that the upward traction has some committed traders buying on every dip and respecting the pattern as an important breakout looms near.