Forex: NZD/USD breaks up pennant pattern; 0.8480-0.85 feasible?

FXstreet.com (Barcelona) - The resilient New Zealand economy continues to give joy for long players on the Kiwi, and after the pair consolidated within a tight pennant pattern, the January s/a adj PMI in New Zealand, up at 55.2 from an upward revised 50.4 in December, has acted as the catalyst sending the pair surging just above 0.8450 from 0.8407.

The technical picture is still unresolved, with price activity compressed within a 0.83-0.8480 day range for most of this year, yet the recent upside break suggests a retest of February highs is looming. According to varies market sources, there is some talk of a 0.8500 barrier, which should imply some stops above. Notice since February 2012, this level has been defended tooth and nail.

A break higher opens up next target at 0.8565/70, August 2011 high, immediate support is now seen at 0.8425/30, intraday level.

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