The NZD/USD pair tried to rally during the session on Friday, but struggled to hang onto the gains. The market is currently sitting on top of the 0.65 level. The shooting star should favor a downward move given enough time, and I think that we will see this move soon. The time of the year isn’t conducive to big moves, so we may have to bounce around for a bit in order to build up enough momentum to finally break through this support barrier. The US dollar should continue to be one of the favorite currencies around the world, and this should be yet another catalyst for this pair to go down.
The shape of the candle should indicate that we are going to see continued bearish pressure as it shows that as soon as we tried to rally – the sellers got aggressive again. The fact that we can’t even rally for any length of time at this point tells me we are a long way from seeing any real gains.
Selling all rallies
As far as I see, there is no way to go long of this pair for any real length of time, as the commodity markets aren’t offering any real support for the Kiwi at the moment. The 0.6750 level is becoming some kind of ceiling at this point, and I think that there is little chance of this pair breaking above there. The market should continue to offer selling opportunities on short-term rallies, as the sellers have been so aggressive. The Kiwi tends to be rather sensitive to Asian economies as well, as they are major exporters to that region. With this, there are too many factors keeping this currency soft.
Also, let us not forget that the RBNZ had a recent rate cut. The markets haven’t forgotten that either, so I think with the Federal Reserve looking to hike later this year, it makes sense that we eventually break down to the 0.6250 level.
