- The NZD/USD currency pair has pulled back ever so slightly during the trading session on Tuesday, as the 0.64 level continues to be very resistant.
- In fact, I think there is significant resistance extending all the way to the 0.65 level, so therefore I think that we have a lot of trouble waiting for buyers just above.
- Underneath, we have the 200-Day EMA and the 50-Day EMA indicators, and therefore I think you need to pay close attention to those as well.
Pay Attention to the Size of the Candlestick
In other words, we are essentially squeezing in the same general vicinity. The size of the candlestick is very telling, because we just did not have a whole lot to do during the day. The fact, the Monday candlestick was a bit of a shooting star suggests that perhaps the sellers are becoming a bit more aggressive, but will we need to see is the Thursday Consumer Price Index announcement comes out and should be a major influence on where we go next. I do think that this market will continue to be noisy, and it is worth noting that we do have a bit of a bullish flag. Whether or not the bullish fly kicks off is a completely different question, because quite frankly it has not done so. In fact, I would not be overly excited about that flag until we get above the previously mentioned 0.65 handle.
On the other hand, if we turn around a breakout below the 50-Day EMA, extensively the 0.62 level, then I think the New Zealand dollar has much further to go to the downside, with at least a 0.60 level underneath being a target. Ultimately, I do think this is a very real possibility, but we need to see US dollar strength across the board. The Federal Reserve keeps reiterating that it is going to remain very hawkish going forward, but at this point it seems like the markets refuse to pay attention. Overall, this is a market that will be highly sensitive to commodities and risk appetite overall, so keep an eye on everything that’s going on around the world as far as risk appetite is concerned. If it starts to fall off, then we will almost certainly see the spare drive, perhaps strengthening the US dollar in that environment.
Ready to trade our daily Forex forecast? Here’s a list of some of the best Forex brokers to check out.