NZD/USD Price Forecast January 8, 2018, Technical Analysis

The New Zealand dollar was relatively quiet during Friday trading, especially considering that there was a jobs number in the United States. Ultimately, this is a market that I think continues to go higher over the longer term, but we may be taking a bit of a break to build up enough momentum. · FX Empire

Christopher Lewis

Updated Fri, Jan 5, 2018, 7:32 PM

The New Zealand dollar went sideways initially during the trading session on Friday, but once the jobs number came out as a bit of a mess in America, the New Zealand dollar rallied against the greenback. Ultimately, I think this pair is going higher anyway, so it was probably just an excuse to put a short-term bid into the kiwi dollar. Remember that the commodity markets have a massive influence on what happens with the New Zealand dollar, so if they can rally overall, it’s likely that the New Zealand dollar will go much higher. However, I also recognize that structurally we have a significant amount of support below at the 0.71 handle, an area that has been resistance in the past.

Overall, the US dollar looks to be soft, and I think that will continue to be the case going forward into 2018. While we do expect 3 interest rate hikes coming out of the Federal Reserve, that’s already known, so there’s not much else to price into the US dollar beyond that. Also, if it’s a “risk on” environment, that’ll benefit the New Zealand dollar as global economies around the world will demand for commodities. In general, I like the kiwi dollar, and I think we are going to go back to the top of the overall consolidated area, which means the market is reaching towards the 0.75 level longer term. Buying on the dips continues to be a good way to play this market.