![\"nzdusd,](\"http:\/\/www.laidtrades.com\/wp-content\/uploads\/2010\/12\/121910nzdusd.png\")
<\/p>\n<\/p>\n
Happy Holiday’s FX friends! Hope your trades are giving you dividends especially these days. Anyway, those who are long on the New Zealand dollar or the Kiwi as what investors call it in the street, should start thinking about lightening your positions. Why? Well, if you look at its daily chart, you will see that it has recently broken down from a head and shoulders pattern. In the process, it has also breached its uptrend line. As some of you might know, a break down from such pattern signals a bearish reversal. So if the NZDUSD pair fails to go over the formation’s neckline at 0.7400, it could fall all the way down to just above 0.6800 (computed by projecting the height of the pattern from the point of break down). On the flip side, a successful move above 0.7400 could send the pair at least back in sideways motion.<\/p>\n
Upcoming fundamental data from New Zealand this week also points to a weak Kiwi. Tomorrow (December 21) at 9:45 pm GMT, New Zealand’s current account deficit for the third quarter of 2010 is expected to have widened to -NZD2.23 billion from -NZD0.88 billion. The current account measures the difference in between imported and exported goods, services, income flows, and unilateral transfers. The increase in the deficit means that more money had sent more money out than it had received. Also at hand this week is New Zealand’s 3Q GDP growth on December 22 at 9:45 pm GMT. Based on the market forecast, New Zealand’s GDP growth is expected to have cooled to 0.1%, half of the previous quarter’s 0.2% economic gain. Looking closely at the country’s retail sales which can be used as an indicator of overall consumption, data shows that headline sales remained flat in the third quarter, falling by 0.5% in July, 0.0% in August, before finally rising by 1.7% in September.<\/p>\n