The New Zealand dollar fell during the week, as the 0.7350 level continues to offer a significant amount of resistance. If we can break above there, the market should continue to go to the 0.75 handle, but I also recognize that there is a significant threat of the market rolling over as we have been overextended for some time. The RBNZ continues to sit with a neutral stance, so that of course will put a bit of a damper on the New Zealand dollar, but if risk appetite comes back into the marketplace, it’s likely that the New Zealand dollar should continue to go much higher. Obviously, the market should continue to find reasons to go higher if we can rally in the stock markets and of course the commodity markets. If we were to break above the 0.75 level above, that should send the market to the 0.7750 level.
Pullbacks? Could be buying opportunities
I think that a pullback from here could be a quick buying opportunity if we can slice below the 0.7250 level. I would be especially interested in the 0.72 handle, and obviously the 0.70 level as it is such a large round number. I think that the recent impulsivity in this market should suggest that the markets ready to go higher, but when you look at the longer-term chart, you can see that the 0.7350 level has offered a lot of selling pressure in the past. Because of this, it’s going to take quite a bit of momentum to break out, so therefore a pullback would not be surprising at all. The market is overbought, but that also shows a significant amount of resiliency and could lead to much higher levels given a slight push.
NZD/USD Video 10.7.17
This article was originally posted on FX Empire