New Zealand dollar falls again during week

The New Zealand dollar has broken down significantly during the week again, slicing through the 0.69 level. I believe that the market will continue to see support in this general vicinity, but if we were to break down below the 0.68 level, that would unwind this market rather drastically, perhaps breaking things down to the 0.65 handle. This is a market that has got a bit oversold though, and as we are approaching the bottom of the overall consolidation area for the last two years, it’s likely that we could see some choppiness. I think that it’s a simple situation where if we break down below the 0.68 level, then the market unwinds. Otherwise, if we turn around and break above the 0.70 level, the longer-term chart will continue to go much higher.

I believe that the market is reacting to capital outflows from New Zealand, and of course the interest rates in America rising. I believe that the market is going to be a very interesting one to watch, but out of the commodity currencies it appears that the New Zealand dollar is the weakest link. I believe that if one of them is going to collapse, it’s very likely that this would be.

If we do rally above the 0.70 level, it’s likely that we would see the New Zealand dollar go looking towards the 0.75 handle. I believe that the markets are going to be very interesting to watch as this has been an area that has been important more than once.

NZD/USD Video 21.05.18