Comment: Having comfortably met our extended measured target from ‘triangle’ consolidation (0.7200), what next? The scale and steepness of the rally since March is seen as vindicating our view that the collapse over the twelve months starting in March 2008 was ‘wrong’, caused by an incorrect interpretation of events and an overbought New Zealand dollar. Needless to say Kiwi is overbought today though bullish momentum very strong by historical standards. Once again it is challenging key ultra-long term resistance between 0.6900 (one standard deviation from the mean since 1982) and 0.7400. A quarterly close above 0.7200 would probably increase upward pressure for a re-test of the psychological 0.8000 and then the all-time high at 0.8213.
A weekly close below 0.7000 forces us to adjust.
