NZD/USD Rising Wedge Continuation

For traders who read my May 18 update on why I’m bullish on the NZD/USD, here’s an alternative, intraday set up to take advantage of a rally.

5-25-2011 7-19-25 PM.jpg

The NZD/USD is trending higher but the transition is fresh.The Rising Wedge is shallow but could provide 1) near-term support for a push higher or 2) a near-term rally through the uptrend line resistance. Either way this pattern is positioned perfectly to be a litmus test for the 240-minute NZD/USD uptrend. Chart pattern alert courtesy of Autochartist.

The resistance along the 0.8000 level will present a particular challenge to NZD/USD bulls however a break through a “00” can attract more buying momentum and that’s partially what will be needed. What else? Add to that a U.S. Dollar breakdown through 76.00 and higher commodities prices through either an equities rally or dollar weakness and the NZD/USD will propel higher continuing what has mostly been a two-month rally before the recent mid-May consolidation.

The support of the pattern has three levels to rest on: The support of the 34EMA Wave and the uptrend line support at 0.7900 and the”00″ major psychological level itself.