NZD/USD forecast for the week of October 30, 2017, Technical Analysis

The New Zealand dollar continued to show negative pressure during the week, as although we initially tried to rally, the 0.70 level offered enough resistance to turn things around and break down towards the 100% Fibonacci retracement of the most recent move. The 0.68 level underneath is massively supportive, and if we break down below there, the market is more than likely going to go down to the 0.65 handle, and then eventually the 0.63 level after that. Ultimately, this market tends to move based upon risk appetite, so pay attention to how commodity markets and stock markets behave. If they start to show signs of weakness again, then the New Zealand dollar will roll over. Remember, more than anything else the New Zealand dollar is considered to be a proxy for the overall risk appetite and commodity market attitude around the world.

Elections

There’s also the concern about a new prime minister, which most traders believe will be a heavy spender, and therefore essentially killing the Kiwi. Ultimately though, I think that’s probably a bit overdone, but stock markets and several of the risk appetite based markets are bit overdone currently, so we may have pressure. The New Zealand dollar is going to be very difficult to own until we break above the 0.70 level, which will be a bit of a challenge. I would anticipate that we will get volatility this week, but I would keep an eye on the 0.68 handle. A breakdown below there has me aggressively short. A break above the 0.70 level has me aggressively long, because the pair could find itself turning around quite rapidly. Between those 2 levels, expect a lot of noise and an almost impossible market to trade from the longer-term perspective.

NZD/USD Video 30.10.17