The New Zealand dollar is poised to go higher from current levels
A very big technical level has been reached by the New Zealand right around the London close today. We have seen the weekly support trendline tested and the currency has hit a new 12 month low against the US dollar. We think that this is a great buying opportunity for daily calls and weekly calls on this pair.
While current prices around 0.8065 are already about 15 pips above the level hit earlier in the day, we think that the level is perfect for buying daily and weekly calls. If however we see an hourly close below 0.8050 we would only buy weekly calls.
This opportunity is valid for three expiry periods - tonight's daily expiry, tomorrow's daily expiry and the end of the week expiry with all our opinions leading to call buying at 0.8065-70. The whole spectrum of the move can be unfolded in the next weeks and we could see binary options on the NZD/USD forex pair rally all the way to 0.83.
For now we will be cautious only in case that we see a drop towards 0.8050 and beyond. There is not much data which will be affecting the markets in the coming days, but there is certainly enough risk appetite on the markets for now to trigger a move in pretty much any currency pair.
We will not be buying daily puts in case we see a break below 0.8050, as this is a weekly support line and the event can materialize into a false break, which will bring in some additional tension to this particular binary options market.
From a fundamental point of view we are seeing all the good news for the US currency priced into the market and some weakness signs in the data points recently. If those weaknesses continue to evolve we will certainly be getting even more call buying opportunities.