The New Zealand dollar fell significantly during the week, breaking down below the 0.68 level at one point. However, we did find a bit of support, and it rallied a bit. However, I think that it’s only a matter of time before we break down below the bottom of the candle, and once we do we should go down to the 161.8% Fibonacci extension level, coinciding with the 0.6350 level. That’s an area that had been supportive in the past, so it makes sense that we would make a run down to that level. Rallies of this point in time will probably offer selling opportunities, the 0.69 level being a prime candidate where sellers would jump in. I have no interest in buying this pair, least not until we would break down below the 0.70 level, something that doesn’t look very likely to happen.
Remember that the New Zealand dollar is highly influenced by commodity prices and risk appetite in general. Markets continue to be volatile, and quite frankly I think that the overall attitude of the stock market traders being so over exuberant could set us up for a major “risk off” event. If that’s the case, this market should roll over significantly, and race to lower levels. If we were to break above the 0.70 level above, then I think that the market could go to the 0.7250 level above. Either way, I expect a lot of noise, and most certainly this is, and with the New Zealand dollar as it has the least amount of liquidity when it comes to the major currencies. Longer-term, I am more bearish, but I recognize that we need to be flexible, as the markets have been a bit erratic.
NZD/USD Video 20.11.17
This article was originally posted on FX Empire
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