Forex: NZD/USD - 0.8405/15 demand holds but limited bounces

FXstreet.com (Barcelona) - The New Zealand Dollar was the best performer currency on Tuesday, appreciating over 50 pips or 0.60% against the US Dollar to currently stabilize around 0.8415, following a new 6-week high of 0.8443.

After the price was capped by area of supply at 0.84/0.8415, European traders managed to absorb what little unfilled offers were left to consolidate around the above mentioned supply level before a sharp rise to mentioned new highs.

Since key supply has now been eaten up, barring any negative news in New Zealand or broad-based USD strength, the outlook for the Kiwi looks promising, with no clear supply seen until 0.8455 now, as per Feb 20 drop-base-drop.

On the downside, potential area to join the Kiwi bandwagon may be found around 0.8405/15, area of demand where major institutions are thought to have been big buyers in the latest intra-day rally.

Traders should note, though, that a couple of retests of such zone in the last few hours without much of a bounce may have reduced the chances of longs succeeding as demand is eaten up and prospects for profit margin intra-day don't look so promising either, with next supply spotted at 0.8423/28, a rally-base-drop during late NY trading activity.

If demand fails to hold, next area of buying interest is thought to be at 0.8397/0.84, as per the drop-base-rally observed in the 15 minutes chart earlier in Europe.