![\"nzdusd](\"http:\/\/www.laidtrades.com\/wp-content\/uploads\/2010\/06\/060810nzdusd.png\")
<\/p>\n<\/p>\n
In my post last Friday<\/a> about the NZDUSD<\/a>, I asked if the Kiwi\u2019s recent surge against the greenback was about to turn sour. During the past couple of weeks. the NZDUSD had noticeably been rallying within a rising wedge formation. Technical traders, however,\u00a0deem this pattern as bearish since for them wedges just represent a correction in prices. I also noted last Friday that the pair was having a hard time in going past the 0.6850 resistance. The inevitable happened during\u00a0Friday\u2019s US session when the pair eventually broke down from the rising wedge pattern. Worse, the pair even gapped down to during the start of Monday\u2019s trading as the Asian market priced-in\u00a0 the recent events that had happened in the US and Europe.<\/p>\n Presently, the pair is trading around 0.6600. A break below its 2010 low or the 0.6550 psychological support could send it all the way to 0.6200.<\/p>\n On the sentiment side, the announcement of the Hungarian officials regarding the possibility of a sovereign debt default by Hungary\u00a0sparked some fears that the debt crisis in the euro zone are already spreading across the continent. This, of course, led to a broadbased selling of the higher yielding currencies like the NZD. On a separate report, the weaker-than-expected US non-farm employment change (431k vs. 5521k) also added to the market\u2019s already weak confidence that further weighed on\u00a0the non-dollar currencies.<\/p>\n Tomorrow\u2019s possible rate hike by the Reserve Bank of NEw Zealand coulg, however, provide some temporary lift for the Kiwi. The central\u2019s bank\u2019s rate is seen to be raised to 2.75% from 2.50%. Despite the country’s notable improvement in its jobless rate (from 7.1% to 6.0%), its retail sales account failed to meet its 1.2% growth projection during the last month with only a 0.5% gain. Nor also that its big brother, the RBA, halted its rate hikes this month due to a significant drop in housing. If the RBNZ does the same especially given the market\u2019s projection, the Kiwi could once again take another blow. A rate hike, on the on hand, could slow down the currency\u2019s present decline.<\/p>\n