New Zealand dollar rallies then fails against the greenback for the weekThe New Zealand dollar initially rally during the week, reaching towards the 0.70 level before failing again. We ended up forming a bit of shooting star, and at the bottom of a consolidation range that is a pretty negative sign.
The New Zealand dollar rallied significantly during the week, reaching towards the 0.70 level. That’s an area that of course attract a lot of attention as it has not only been important a couple of times, but it is also a large come around, psychologically significant number. I think that turning around the way we have to form a shooting star suggest that we are ready to break down below the support underneath at the 0.68 handle, and if we do this market could unwind rather drastically. At that point, I think it would be easy to imagine the 0.65 level being targeted, and then perhaps even the 0.63 level after that.
The US dollar has been very strong as of late, and I think that will continue to be the case going through the summer. I think rallies are more than likely going attract a lot of selling, but if we did turn around and break the top of the shooting star for the week, that would of course be very bullish sign and I think would send this market looking for a couple of handles to the upside. Overall though, when I look at this market it looks like we are ready to continue to grind lower, but it may take a bit of effort to do so as the 0.68 level has been important for the last 2 ½ years. Pay attention to the US interest rate markets, because if they continue to show higher rates, that will certainly break this market down.