NZD/USD is a currency pair overlooked by technical and fundamental traders alike, but it certainly features interesting patterns, including technical ones. There is a reason why it appears on the list of most predictable currency pairs.
0.7050 was first approached in mid April: the pair advanced gradually to this line and then began a slow retreat. A second move towards this level was even slower, but once again, it worked perfectly well and the pair was rejected.
This fundamental background is the big turnaround in the dollar seen on Tuesday: the greenback fell to new depths, and this is when 0.7050 was attacked, before making a great comeback, when the the pair began sliding. The kiwi was also hurt by the a drop in milk prices that helped it climb down, while the OK employment report in New Zealand helped make the move gradual.
And even if you are not a fundamental trader but only look at the price action, you can see how the move is gradual: there was enough time to jump on the bandwagon on the way up and also on the way down: no need to have the most sophisticated algorithmic tools.
A gradual rise to resistance with a perfect and slow rejection. This doesn’t always happen with EUR/USD, GBP/USD or other popular currency pairs.
Here is how it looks on the one hour chart that shows the very gradual move. You can download the top 5 predictable currency pairs below.