NZD/USD forecast for the week of December 25, 2017, Technical Analysis

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The New Zealand dollar initially fell during the week, but then turned around to form a bit of a hammer the hammer sits just below the uptrend line, which of course offered support in the past. It now offers resistance, but we could be seeing a bit of attitude change. · FX Empire

Christopher Lewis

Updated Fri, Dec 22, 2017, 11:00 PM

The New Zealand dollar initially fell during the course of the week, but turned around to form a bit of a hammer. The hammer is pressing the bottom of the uptrend line that had kept this market bullish initially, and now that we are below that trend line we need to decide whether we are going to continue to go lower, or if were going to go back above that uptrend line. If that’s the case, the market could go to the 0.75 level above, which is the top of consolidation for the last year and a half. Breaking above the 0.75 handle would be very bullish, sending this market much higher. I think that’s a story for next year, but at this point it looks likely that we are going to attempt that. I think that if we break down below the 0.68 level though, that would be a very bearish sign, perhaps send in the market down to the 0.63 level.

Remember, the New Zealand dollar is essentially a “risk on” currency, but at this point I think that the market is going to lack of volume, so this week might be a bit difficult. I think that the market should continue to be following commodity markets and stock markets in general going forward, now that we have gotten the concerns of spending out of New Zealand behind us. Remember volume is going to be an issue, keep your position size small.