NZD/USD Forecast: Kiwi Pauses at the 200-Day EMA

• The NZD/USD currency pair has pulled back just a bit during the trading session on Friday, as we continue to hang around the 200-Day EMA.
• Keep in mind that this is an area that will attract a lot of attention as the 200-Day EMA typically defines the trend for longer-term traders.
• The 0.63 level above seems to be a bit of resistance, and that could open up the possibility of a move to the 0.64 level.

Advertisement

Take advantage of today's market opportunities

START TRADING NOW

The Role of Central Banks Is At Stake

If we turn around and breakdown below the 0.62 level, then it’s possible that we could go back down to the 0.61 level. Anything below there opens up the possibility of a move down to the 0.60 level, which is where the 50-Day EMA comes into the picture. Currently, we are sitting just at the 200-Day EMA, so it certainly looks as if we are going to try to go to the outside, but with the jobs number coming out on Friday, a lot of people will be paying close attention to how stubborn employment is, because quite frankly the Federal Reserve has to pay close attention to inflationary pressures.

The Royal Bank of New Zealand recently raised rates a full 75 basis points, and therefore people think that the RBNZ will continue to be very hawkish. If the Federal Reserve sounds even slightly dovish, that will almost certainly send the New Zealand dollar higher over the longer term. With this being the case, it’s likely that we will see a lot of volatility, and of course people paying close attention to the idea of what happens next with the interest rate situation in America. I do believe that the Federal Reserve is going to stay extraordinarily tight for the long term, with higher rates than most traders are used to. Whether or not New Zealand follow suit remains to be seen, but if we do get some type of major selloff in risk appetite, then it does make a lot of sense that we would roll over and start breaking down.

The next week should be very choppy but seems to have more of an upward tilt. That being said, I would not expect anything major until we get through the Friday session, once we get that jobs figure and try to figure out how aggressive the Federal Reserve is going to have to be going forward, and how aggressive they may be during the December rate announcement.

Ready to trade our Forex daily analysis and predictions? Here are the best Forex brokers to choose from.