There was a fair bit of interest from readers when we were above the 100 daily and weekly moving averages at 0.8105 and 0.8085 and while I was interested in taking a long I felt that there would be a move lower before going higher.

We hit my preferred target at the 2011 support line on the 23rd of August at 0.7800 and the pair got smacked lower to 0.7758. The fall looked short lived and we were looking good as we headed back up into the 0.7860’s.

NZD/USD technical analysis daily chart 2 September 2013

NZD/USD daily chart 2 September 2013

Since then the pair got hosed alongside the aussie and we’ve been down into the low 0.7700’s. The cross is now holding below the broken support line and with dollar strength starting to dominate the door is open to further losses. As expected, this morning we got a boost from Chinese data but that’s starting to evaporate already and despite putting on nearly 100 pips to a high of 0.7833 we’re back below the line and 0.7800.

I’m long at 0.7805 and the trade isn’t conforming to the reason I put it on, i.e that support line. In most cases I would have bailed by now but I’m going to hold this a little longer as we seem to be undecided about moving in either direction and are hogging the line quite closely. I’ve got my original stop down at 0.7670 which is just below the June lows but I may consider moving that up into the mid 0.77’s.