NZD/USD forecast for the week of August 3, 2015, Technical Analysis

The NZD/USD pair went back and forth during the course of the week, showing a fairly negative looking shooting star. With this being the case, if we can break down below the 0.65 handle, the market should break down significantly. The orange dashed line on the chart should be resistive, and should extend that resistance all the way to the 0.70 level. With this, we do believe that the New Zealand dollar eventually break down, and heads towards the 0.6250 level next. The New Zealand dollar of course continues to struggle in general, mainly because of the commodity markets been so soft. Commodity markets of course have quite a bit of negativity to them, as the US dollar continues to be the strongest currency that we deal with.

New Zealand recently had an interest-rate cut, and as a result the downward pressure continues. With this, it’s only a matter of time before this market breaks out and as a result we are sellers overall. We believe that it’s impossible to buy this market until we break well above the 0.70 level, and quite frankly the 0.72 level is even better. The downward pressure has been so strong that it would make sense that we continue, but you have to keep in mind that the time of the year isn’t conducive to markets making massive moves.

At this point in time, we are simply selling rallies, and of course breakouts. The markets could continue to be volatile overall, but the longer-term charts look about as bearish as you possibly can imagine. With this, we believe that sellers will return to this market again and again, and as a result this will be one of the easiest trades to take. We have no interest in buying as mentioned previously, and quite frankly don’t really see much in the way of an opportunity for things to change anytime soon. The downward trend has been so strong that we would need to see a long-term bullish sign, perhaps on the monthly chart before we would change our opinion, unless of course we get the aforementioned impulsive move to the upside.