The NZD/USD pair fell during the course of the session on Monday, testing the recent lows from just a few sessions ago. If we can continue to fall from here, I believe that we will first head to the 0.68 handle, and then the larger, round significant number which is the 0.65 just below. I believe that the market then will probably find buyers, but the reality is we may continue to drop from there.
Rallies at this point in time could be selling opportunities as the 0.70 level above is resistive. I believe that a resistive candle after a short-term rally would be a good way to get involved in this market, as the New Zealand dollar continues to fall. The New Zealand dollar is not only falling against the US dollar, but several other currencies as well. With that, I believe that this market, which of course is the absolute measuring stick of New Zealand dollar strength, will continue to fall and therefore you can sell the New Zealand dollar against just about anything out there.
Selling rallies, selling new lows
These way to trade this market is to simply sell it every time it rallies and shows a bit of resistance above. If we can break down to a fresh, new low, I would be a seller there as well. Quite frankly with the New Zealand dollar offers nothing to me as far as I can see, and therefore I don’t really imagine a scenario in which I can buying the New Zealand dollar until we clear the 0.72 level, something that does not look very likely at this point in time. Because of that, I simply am looking for an opportunity to take advantage of perceived value or continuation, either is perfectly fine as far as I can see. As long as the commodity markets look a little bit soft, the New Zealand dollar will continue to fall in reaction as well.
