NZD/USD forecast for the week of October 16, 2017, Technical Analysis

The New Zealand dollar rallied significantly during the week, testing the 0.7050 level underneath. Forming a massive green candle of course is a very bullish sign, but we also used the 61.8% Fibonacci retracement level as a basis for rallying as well. Remember, the New Zealand dollar is highly sensitive to risk, and it’s likely that we will continue to see this market go higher if we can continue to see the commodity markets and stock markets show signs of resiliency. With that being the case, I like this market and buy a break above the top of the candle for the week. At that point, I expect that the market will probably go looking towards the 0.75 level above, which was so resistive in the past. I think that we do extend beyond their, especially if global growth continues, as the New Zealand dollar is known as the “grocery store” of Asia.

On the other hand, if we were to break down below the 0.70 level, the market probably goes down to the 0.68 handle. Softer than anticipated economic numbers out of the United States has been working against the US dollars well, as perhaps it starting to bring down the odds of the Federal Reserve raising interest rates. I believe they still will at the end of the year, but I think that the frequency in the number of rate hikes could be lower than people had anticipated originally. Because of this, the market should continue to find buyers, and I think that the road ahead, although choppy, should be positive as the overall look of the markets during the last several years seems to be one of an upward channel that started down near the 0.62 level underneath.

NZD/USD Video 16.10.17