The NZD/USD pair initially tried to rally during the course of the session on Thursday, but found enough resistance at the 0.67 level to turn things back around and form a shooting star. This runs directly counter to the hammer from the previous session, but it goes with the overall trend. Because of this, I believe that a break down below the bottom of the shooting star is a selling opportunity as the market should then reach towards the 0.65 handle. That level was massively supportive, so it does not surprise me at all that the market would reach towards that area and it would not surprise me at all that the market bounces from their again. With this in mind, I’m looking at this market as offering short-term selling opportunities and not long-term ones.
Commodity markets are not helping the Kiwi dollar
Commodity markets are certainly not helping the value of the Kiwi dollar, as not only did they have an interest rate cut last night, but there simply is not enough in the way of demand for commodities in general. While the New Zealand dollar and the New Zealand economy doesn’t necessarily deal in hard assets, the reality is that it does tend to mimic the general “attitude” of commodity markets overall. With that, as long as the commodity markets continue to suffer, I don’t see any reason why the New Zealand dollar is going to suddenly get a lot stronger. With this, I am sellers of short-term rallies that show signs of failure, and of course a break down below the bottom of the shooting star.
The next question of course is whether or not we can break down below the 0.65 handle? I think we can, but I don’t expect it to happen right away. I think that we will get a little bit of volatility, but will eventually break down. I have no interest whatsoever in buying the Kiwi dollar at the moment.
