NZD/USD forecast for the week of December 17, 2012, Technical Analysis

The NZD/USD pair shot straight up during the previous week as we approach the 0.85 level. This area significant resistance, so we think that it is possible that we see a pullback from the 0.85 level in order to attract more buyers to continue to push the Kiwi dollar higher. We do believe in the longer-term aspects of this trade, and think that the Federal Reserve and its culture easing policy will continue to put a floor under commodity currencies such as the New Zealand dollar, and as such we will buy pullbacks that show signs of support, especially around the 0.83 handle and by a close above the 0.85 handle. We have absolutely no plans on selling at this point.