The NZD/USD pair initially tried to rally during the course of the session on Thursday, but as you can see we turned back around to form a bit of a shooting star. The shooting star suggests that we are going to continue falling, and the fact that we have been in a pretty significant downtrend does nothing to dissuade me from thinking that selling is the only way to go. I think that this recent rally is very little to think about, and it is simply a bit of relief. Ultimately, the 0.65 level above should continue to put pressure on this market, and with the jobs number coming out today we could get a little bit of volatility which has the potential of sending us looking for that area. Any resistance there would be an excellent selling opportunity as far as I am concerned.
Commodity currencies
Commodity currencies in general should continue to suffer and the fact that the jobs number comes out today means that the volatility that’s about to happen could offer a bit of a relief for commodity currencies in general, but I believe that it will simply be a nice selling opportunity as the shooting star for the session on Thursday suggests. After all, the market shows signs of pressure due to that candle, and we now have to look at any rally as potential “value” in the US dollar.
In fact, even if we get above the 0.65 handle, I don’t think that this market has the ability to go much higher than they are. There is a significant amount of resistance all the way to the 0.6750 level, as I have signified on this chart with the orange dashed line. It is not until we break well above there that I would even remotely consider buying the New Zealand dollar, and it is very unlikely that we will see that today. I will look for an overreaction to the number in order to start selling again, or a break down below the aforementioned shooting star.
