- The NZD/USD currency pair has gone back and forth during the trading session on Wednesday, as we continue to hang about between the 0.64 level in the 0.65 level.
- That is a 100 point range that I think continues to offer a massive resistance “zone”.
- Therefore, I believe that if we can break above the area, then it obviously gives a clear signal that the New Zealand dollar is going to go higher.
FOMC Meeting Will Decide the Next USD Move
What I find interesting is that it occurs just ahead of the FOMC meeting, which of course is a major influence on where the greenback will go next. Given enough time, I believe we have a situation where we have to make a bigger decision, and once we do, this market could really take off in one direction or the other. We break above the 0.66 level, then he gets rid of the last vestiges of resistance, and it’s very likely that you have the New Zealand dollar going to the 0.70 level. On the other hand, if we break down below the 0.64 level, then we will initially challenge the moving averages underneath, including the 50-Day EMA and the 200-Day EMA indicators, and then the bottom opens up underneath there.
Keep in mind that the New Zealand dollar is highly sensitive to global growth and of course Asia, which is in the midst of reopening, at least the case of China. That does bode well for New Zealand, but at the same time we have seen the lackluster performance of the rest of the world that could cause a little bit of trouble. I think this is a situation where we see a lot of volatility coming, but as soon as we get some type of impulsive candlestick that breaks out of this short-term region, then I think we get a nice trade. We are most certainly on the precipice of something big happening, as the FOMC meeting and perhaps more importantly, the press conference afterward, will probably have a major influence on what happens next. We recently had the so-called “golden cross", but I think that is relatively unimportant at the moment. I think this shaking out of weak hands will give us a nice idea as to where we can go over the longer term, so I will be very interested in how the weekly candlestick closes.
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