The NZDUSD cross, also known as "Kiwi", is an excellent precursor of the "Ted Spread" trends, i.e. the spread between the 3-months Libor rate and the U.S.A. government similar expiry date. Up to the middle of  2009, the NZD USD cross anticipated with great precision the evolution of the Ted spread of about 30 weeks (red line), but afterthat, the temporal lag has been reduced to approx 20 weeks (blue line). The ability of the change anticipating the Ted minimum to march 2011 and the maximum to December 2011 can be appreciated (58 basis points). In case this model still resists, then it will be possible to wait for another narrowing of the Ted spread at least until the end of March, before a major new advance anticipated by the powerful upwardtrend (+15%) of NZD USD started at the end of November 2011. On the same cross there can be interesting considerations of a technical nature. The bearish sequence started after the maximum of August at 0.8843 has been divided into five waves, culminating in the bottom of 0.7371 in November. This has generated a strong rebound, nearly close to the 78.6% retracement of 0.8843 - 0.7371,i.e. 0.8528. In this point, the second leg of this rebound is equal to 2 times the firstone (0.7371 - 0.7880) with Rsi indicator definitely in divergence with respect to the recent price trend. We can now expect a  fall in the Kiwi in the coming weeks, and the down trend will be enshrined by the breaking of the 20-days moving average of 0.8321 and a minimum target at 0.79/0.80 (chart source: Bloomberg)

Nzd/Usd