NZD/USD forecast for the week of May 15, 2017, Technical Analysis

The NZD/USD pair went back and forth during the week, testing the 0.6850 level. This is the 50% Fibonacci retracement level from the bounce that the buyers pushed. This is a market that is finding itself in a precarious position right now, because the 50% Fibonacci retracement level also represents an area where we had seen quite a bit of resistance previously. If we can break down below there, the market will then more than likely reach towards the 0.6650 level underneath which of course is the 61.8% Fibonacci retracement level. This is a market that is highly influenced by commodity markets as well, so keep that in mind.

The commodity markets will lead the way

The commodity markets course will lead the way, because of the nature of New Zealand’s exports. The market currently must pay attention to the Reserve Bank of New Zealand monetary policy statement as of late, as it suggested that the worlds markets and more importantly the world’s demand for commodities seems to be waning and they are concerned. This will weigh upon the value of the New Zealand dollar, and suggested perhaps the central bank is much more dovish than originally thought. The US dollar has been strengthening longer-term, at least against the commodity markets and I don’t see anything on this chart that tells me anything different. However, there is a lot of support just below so I think this is going to be choppy and difficult move. Perhaps selling short-term rallies will be the easiest way to trade this market, but I certainly don’t have any interest in buying this market until the underlying fundamentals change, which don’t look likely to happen anytime soon. For now, selling opportunities are the ones I pay attention to.

NZD/USD Video 15.5.17