New Zealand dollar breaks down again for third week in a rowThe New Zealand dollar fell against the US dollar during the week again, for the third week in a row. We are testing the 0.70 level for support, and so far we are finding it. However, when you look at the longer-term charts, we still have a way to go.
The New Zealand dollar has broken towards the 0.70 level during the week, looking for support. That’s an area that has been important more than once, so it’s not a huge surprise that we would stall in this area. I think if we can break down below the bottom of the weekly candle, the New Zealand dollar will come back to the bottom of the overall consolidation range, which I have marked as the 0.68 level. As far as buying is concerned, I have no interest in doing so until we break above the 0.71 level on at least a daily chart.
The New Zealand dollar has been very negative over the last three weeks, as we continue to see a lot of pressure to the upside in the US dollar, as the interest rates continue to rise in the treasury markets. I think that the market should continue to be very noisy, but I do think that we probably will find enough of a reason to go lower. I think that the 0.68 level should hold, but it doesn’t that would be a huge change of attitude in this market. Ultimately, remember that the New Zealand dollar is highly sensitive to overall risk, so pay attention to commodity markets and stock markets, because if they both start falling more than likely the New Zealand dollar will struggle as well. Of course, the opposite is true as well.