The New Zealand dollar has been a bit noisy during trading on Monday, bouncing from the 0.72 level underneath, showing signs of life yet again. I think that there is a significant amount of resistance just above though, so we may need to chop around to build the necessary momentum to go higher.
The New Zealand dollar has initially drifted lower during trading on Monday, but then bounced enough to form a significant pattern of strength. If we can break above the 50 EMA, and perhaps even the 0.7250 level, then I think that the market is ready to continue to the upside. It must be said that the market has made a “higher low” recently, and that of course is a sign that the buyers are becoming a bit more aggressive. If that’s the case, then there’s no reason to think that we can continue to go higher.
On a break to a fresh, new high, the market should then go looking towards the 0.7350 level above, which has been important more than once. A clearance of that allows the market to go even higher. The 0.75 level would start to come into focus at that point, which of course is the longer-term target in general. If we were to break down below the 0.7190 level, the market probably goes down to the 0.71 handle, in a bit of a “risk off” move. I anticipate that the overall attitude of this pair will be highly dependent on what happens in the US dollar around the Forex world, so therefore I believe that the New Zealand dollar itself is a bit of an afterthought. Pay attention to commodity markets, if they start to rally that could help the move to the upside as well.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.