[Note: Factor LLC trades futures and forex markets based on classical charting principles formulated in the 1920s and 1930s. Factor LLC does not consider global macro fundamental factors in market analysis or speculation.]
The NZD's decline in January 2015 completed a 45-month rectangle top on the monthly chart (first chart). This top can be seen in a larger perspective on the second chart displayed.
As a general rule, trends on long-term charts follow a concept known as the “swing principle.” The swing principle holds that major thrusts within a larger trend tend to be equal in length. Applied to the New Zealand dollar, the decline from the April 2015 high should equal the distance traveled in the decline from the July 2014 high to the February 2015 low. The Swing target in the NZD/USD is in the area of 60 cents.
The daily chart shows that the rally into the April 2015 high was a hard retest of the rectangle top. The decline on May 28 is a confirmation that the 45-month top interpretation is correct. Major resistance should be uncovered on any rally back toward $.7200 to $.7300.
Disclaimer: Factor LLC is short the New Zealand Dollar