NZD/USD forecast for the week of October 2, 2017, Technical Analysis

The New Zealand dollar fell during most of the week, but started find buyers towards the Friday session. It looks as if we’re going to form a little bit of a hammer, which is preceded by shooting star. This tells me that the market isn’t ready to go anywhere, and that we should continue to consolidate. I see the 0.71 level as support below, with the 0.74 level as resistance above. Because of this, I think that this is a short-term traders market, and longer-term traders are going to struggle to find any type of value here mainly because of the lack of risk to reward. I think if we can break above the top of the shooting star from the previous we, that would be an extraordinarily bullish sign, and could send this market much higher. However, if we were to break down below the 0.71 level, I think we only get down to the 0.70 level before the support comes back into play. Expect a lot of noise, and keep in mind that the commodity markets have a direct influence on the New Zealand dollar, especially the soft commodities.

Looking to the start, I don’t have any interest in trying to guess as to which direction it breaks longer-term, but short-term trades might be possible to take. I believe that the markets will continue to be noisy, so short-term trading is possible, but I would not get to overly excited about any position, and quite frankly I will probably spend a while on the sidelines as I wait to see some type of clarity. There are plenty of other trees to be had in the Forex one right now, and quite frankly this just isn’t worth the risk that I see in the chart.

NZD/USD Video 02.10.17