New Zealand dollar rolls over to start the weekThe New Zealand dollar fell initially on Monday, breaking towards the 0.6925 handle. The market is starting to show signs of support as I record this, but at this point I think it is only a matter of time before the sellers get involved based upon the overall downtrend. However, I have a couple of levels that I am paying attention to for direction.
The New Zealand dollar has fallen a bit during the trading session on Monday, reaching down towards a 0.6925 level. The market has looked extraordinarily soft to open the week, and it looks likely that we could continue to go lower. I believe that the 0.69 level underneath offering support on Thursday is of course crucial, so if we were to break down below there I think it would open the floodgates for more selling. When I look at the longer-term charts, the 0.68 level underneath has been massive support, and the bottom of the overall consolidation.
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Otherwise, we could rally again but I think there is a massive “ceiling” near the 0.70 level above. A break above there would be an extraordinarily strong sign, but I don’t think that’s about to happen. I believe that rallies are to be sold at the first signs of exhaustion, and of course that should be a continuation of the bearish pressure that we have seen. I think that the markets are starting to run away from certain currencies, and the New Zealand dollar has of course been very negative over the last several weeks. If we were to break down below the 0.68 level, the market would unwind rather drastically, as it has been supportive for the last several years. If we were to break down below that level, then we should continue to go lower, perhaps down to the 0.65 level.