CNH: Will Bullish Momentum Persist?

NZD/CNH remains biased higher after charting an inverse head-and-shoulders pattern over the last two months. A strong rebound in New Zealand's retail sales recorded in Q3 kicked the rate higher at the start to the week, but it has not yet tested last Friday's high of CNH4.5631, let alone Nov 12 cycle high of CNH4.5675. The 38.2% Fibo retracement of the Jul 31 - Oct 20 slide located at CNH4.4973, near the psychological CNH4.5000 figure and the neckline of the aforementioned inverse head-and-shoulders formation, withstood the mild pullback seen earlier this month. The rate has generally crept higher over the last few sessions and last trades at CNH4.5546.

• Gains past last Friday's/Nov 12 highs of CNH4.5631/75 and the 61.8% recovery of the Jul 31 - Oct 20 sell-off at CNH4.5732 would confirm that bullish momentum is intact, clearing the way to Sep 18 high of CNH4.5935. Bears need a fall below the CNH4.5000 area flagged above to regain poise and take aim at the 50-DMA, intersecting at CNH4.4841.