New Zealand Dollar Duration Cycle: NZD/CHF, NZD/JPY, NZD/JPY Key Levels


  • D2014 downside trend stifles the NZD/JPY traders
  • The NZD/CHF coils up just under the key resistance. Is an uptrend on the offing?
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The NZD 24% rise from March lows might be the beginning of the extended duration of strength against the US Dollar, with the break over the long-term trend resistance hinting tat a cyclical uptrend is happening.

The following chart shows the cyclical nature that was observed in the NZD/USD exchange rates over the past 2 decades. Also, the currency pair seems to be largely adhering to what seems like the 8-year rotation.



The bullish Relative Strength Index in the year 2000 showed the end of the NZD 5 year drop from 0.7147, the 1996 high, and fueled a change in the market sentiments, with the prices rising more than 100% to ultimately reach 0.8214, 2009 February peak as Prices of Gold Weaken Ahead of FOMC Meeting Amidst Change in the US Dollar Sentiments.

The latest price rally is quite similar to that which was seen in the bullish cycle that was sparked in 2000 October and might show a more uptrend for the NZD/USD, incase the prices remain well-positioned over the downside trend extension from 0.8836, 2014 high, and is capable of clearing the immediate resistance at 0.6755 Fibonacci resistance (38.2%).

That said, the trade-sensitive currencies might be poised to significantly extend their latest 24% rise against the haven linked peers, with the cycle outlook showing that the rates might climb even upto 45% from the new levels to peak in 2028.

However, this is not certain taking into consideration the uncertainty of the worldwide economic forecast and the ultra dovish stand of the RBNZ (Reserve Bank of New Zealand).

Nonetheless, traders should continue monitoring the long-term developments since the monthly close over 0.6755 Fibonacci (38.2%) might generate the persisting rise back to 0.7558 (2017 high).

The latest 2.7% tilt from the new monthly highs might prove to be just a correction with the process scampering from the support at 0.6655 (21-day Moving Average) and starts retesting the immediate resistance at the new yearly open trading at 0.6733.

That said, the price perfectly positioned over 200-, 50-, 20-day MA, and continue tracking in the confines of the rising channel, the least resistance path is still skewed on the uptrend.

The daily close over the key resistance trading at 0.68 levels might possibly produce a nudge for resting the psychological resistance at the yearly highs.

On the other hand, any failure to overcome this resistance at the yearly high might lead to the correction back to the confluent support.

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