The New Zealand dollar initially trying to start out the month rather positive in September, but as you can see turned right back around every time we rally. With this being the case, it’s likely that the pair will try to break down below the 0.72 level, and once it does I think will try to reach towards the 0.70 level. This is a market that looks like it is trying to roll over, and I believe that we will have a fairly negative month. On top of all of the technicals, I would also state that right now it appears there are some grumblings of negativity around the world when it comes to risk appetite. That tends to be very negative for this market, so I believe that October won’t necessarily be very kind to the Kiwi dollar.
Even if we do rally, I don’t think that’s going to be possible to get above the 0.75 level anytime soon. Not only did we have the massive shooting star on the weekly chart, but we also have a large amount of volatility in that area from early 2015 that should offer quite a bit of resistance.
I think that this pair will continue to be very interesting, but I am selling rallies the show signs of exhaustion on short-term charts, and of course the aforementioned break down of the 0.72 level. I don’t necessarily think we will get down below the 0.70 level right away, but once we do that would be a very negative sign. That would have me thinking about selling in a somewhat aggressive manner, but at this point in time I’m only focusing on the next couple of handles which seem to be to the downside.
Keep in mind that the commodity markets can have an effect on the Kiwi dollar in general as it is a general “barometer” of risk appetite. Ultimately, I believe that the sellers will prevail.