The New Zealand dollar rallied significantly during the trading session on Wednesday, reaching towards the 0.71 handle. If we can break above there, I think that eventually we will probably try to grind towards the 0.75 level after that. There is a lot of noise in this pair, as it is very sensitive to risk and of course commodity markets overall. I think that if commodities rally, the New Zealand dollar will be one of the first places that currency markets look towards. I think if we break down below the 0.70 level, it’s likely that we could drop towards the 0.6950 level, possibly even the 0.69 level after that.
The markets will continue to be very thin over the next couple of sessions, so I think that the markets are going to be a bit difficult to deal with. They could get very volatile based upon the lack of participants, but I think at this point it looks likely that the upward proclivity should continue, as the US dollar has been punished again several other currencies as well. The New Zealand dollar has been oversold for some time, and now I think that we are eventually going to reach towards the previously mentioned 0.75 level, which has been massive resistance. Lots of bouncing around is likely going to be the case, but I think overall the buyers are starting to flex their muscles in a market that is starting to offer a bit of value.
NZD/USD Video 28.12.17
This article was originally posted on FX Empire