NZD/USD Forecast October 16, 2017, Technical Analysis

The New Zealand dollar went sideways initially during the day on Friday, but then went back and forth to reach for support underneath. We then broke above there to reach towards the 0.72 level, which of course is much more important as it is a large, round, psychologically significant number. If we can break above there, the market should then go to the 0.75 level above, which is a longer-term support and resistance level that I think traders will be looking for. The impulsive candles that we see on the hourly chart is due to the lower than expected CPI readings out of the United States, so that of course has put bearish pressure on the US dollar. If commodity markets continue to rally, it’s likely that the New Zealand dollar will continue to go higher.

I believe pullbacks are buying opportunities, and now that the 0.7150 level underneath should be supportive. I think that the New Zealand dollar will remain volatile as it typically is, but given enough time I think we will find enough of a reason to go long repeatedly. I think that the volatility may shake some traders out, but I’m looking to add to my position every time we pull back about 30 or 40 pips. I will add 10% to my original core position, and then build towards the inevitable 0.75 level. If we did breakdown, I believe that the 0.70 level underneath will be the absolute “floor” in the overall uptrend. The acceleration of the uptrend was helped by the announcement but quite frankly I think that it’s only a matter of time before we find reason enough for this market to continue to show strength again. Once we can get to the 0.75 handle, a breakout above there would be extraordinarily bullish and send this market towards the 0.80 level later.

NZD/USD Video 16.10.17