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The New Zealand dollar has broken down a bit during the trading session on Thursday, slicing through the 0.69 level, an area that shows signs of major support on longer-term charts. It looks like the market is going to test that area eventually, and I think that eventually signs of negativity will appear on short-term charts that you can continue to short. The 0.69 level above is an area that would make sense as it is a large come around, psychologically significant figure. The 0.68 level underneath is massive support going back several years, so I think that if we were to break down below there the market could unwind rather drastically. I think we are going to continue to see US dollar strength over the course of the summer, so it makes sense that we would see this market fall. I think the 0.70 level above is going to be massive resistance, but if we were to turn around and finally break above that level, then I think the markets could continue to go much higher.
Expect volatility, but with a strengthening US dollar it could hurt a lot of commodity markets. If that happens, that should also put bearish pressure on the New Zealand dollar. The market breaking down below the 0.68 level sends this market looking for the next major support level in the longer-term charts, the 0.65 handle. This would of course be a major turn of events, so I think short-term selling is probably the best way.
NZD/USD Video 18.05.18
This article was originally posted on FX Empire