The New Zealand dollar fell slightly during the day on Monday, but then shot through the roof, breaking will above the 0.73 handle. A break above that is a good sign, and I believe that the market will continue to go higher. I think that were going to go to the 0.7350 level after that, and then perhaps to the 0.75 handle. I believe that the New Zealand dollar will continue to be volatile, but with an upward bias. I believe that the commodity markets of course can help, as the New Zealand dollar tends to be a bit of a barometer for those markets, but it appears that the kiwi dollar has been outperforming for several different reasons anyway, not the least of which of course is the slightly positive carry that we still enjoy in this market.
Looking for value
I continue to look for value in this market, and look at pullbacks as exactly that. Given enough time, I believe that we will go looking towards the 0.75 level, which is a long-term psychological level, so having said that I think that the sellers may appear there, but once we break above that level I think we could go as high as the 0.80 level longer term. I don’t have any interest in selling this market, especially after the action on Monday as it shows a significant amount of upward momentum and wherewithal when it comes to this currency. While I do like the US dollar against many other currencies, I do not like it against the New Zealand dollar, and I believe as a result we will continue to find buyers into the future, pushing this market much higher. Selling is all but impossible for me to do in this scenario.
This article was originally posted on FX Empire