NZD/USD Forecast May 12, 2017, Technical Analysis

The New Zealand dollar has fallen apart during the session on Thursday, as the Royal Bank of New Zealand has suggested that perhaps the markets are a bit overheated, and that the New Zealand economy itself may suffer due to the slowing global demand of commodities. Ultimately, this is a market that looks likely to break down, and although the last several hours have been somewhat stabilizing, this could end up being a churning to build up enough momentum to break down significantly. If we break down below the 0.68 handle, I think that the longer-term downtrend continues. Alternately, rally should offer selling opportunities, specially near the 0.69 handle. And exhaustive candle would be reason enough for me to start selling as the New Zealand dollar looks to be in serious trouble.

Central banks

Central banks make statements about global economies that cause a lot of headlines. The fact that New Zealand thinks things look less than stellar suggests that perhaps there is more trouble in Asia than thought, and the New Zealand dollar course will take it on the chin. We also have the US dollar showing strength in general, so that could continue to drive this pair lower. Commodity currencies overall have struggled, and with that being the case I think that the New Zealand dollar being the “barometer” of commodity markets suggests that we will continue to see bearish pressure. I don’t have any interest in buying, at least not at this point. Ultimately, there will be a lot of volatility but I think rallies only offer value in the US dollar more than anything else, and I am not looking for any type of major change in the short run. If we can break down, we will more than likely go looking for the 0.65 handle over the longer term.

NZD/USD Video 12.5.17