New Zealand dollar rallies and then turns around on Friday
The New Zealand dollar has gone back and forth during the past couple of days, as we continue to consolidate. I think that the market trying to rally during the day on Friday and then turning around rather significantly suggests that we are very likely to continue to go lower overall. I think that the market participants will continue to look for value in the greenback, and that the New Zealand dollar will of course continue to suffer at the hands of higher interest rates in the United States. Beyond that, there is a high expectation of correlation to Asia, which is underperforming North America right now.
If we do break down below the 0.69 level, we will probably make another run towards the 0.6850 level, and then possibly the bottom of the longer-term consolidation area at the 0.68 handle. That being said, we have made a “lower high” as of late, so I think that’s the most likely of situations to happen. As I record this video, the US dollar continues to strengthen against several currencies around the world and there’s no reason to think that the Kiwi dollar would be any different. In fact, this pair tends to be more sensitive to US dollar strength and many others, so it might make for a nice trade although we don’t have as far to fall as we do in other pair such as the GBP/USD. Rallies at this point in time will continue to struggle with the idea of breaking above the 0.70 level.
NZD/USD Video 28.05.18
This article was originally posted on FX Empire
