- The NZD/USD has rallied rather significantly during the day on Friday, testing the 0.65 level yet again.
- At this point, it’s probably worth pointing out that the majority of the gains were had during US trading, so it makes a certain amount of sense that you take some of this momentum with a grain of salt.
- The market will continue to be very volatile, but if we can break above the 0.6533 level, I think at that point we are more likely than not going to see this New Zealand dollar market really take off to the upside.
On the other hand, if we turn around and take out the bottom of the candlestick for the trading session on Friday, then it’s likely that we could go down to the moving averages underneath, which just crossed, kicking off the so-called “golden cross.” The 50-Day EMA and the 200-Day EMA tend to offer a lot of support and resistance, but as they are together, I would anticipate that it could offer a bit of a floor in this market.
It Looks as if The Buyers are Trying to Jump
The size of the candlestick is somewhat impressive, especially considering just how hard we sold off during the previous session. However, we had not broken above the top of that candlestick, so we have not completely reached exit velocity. The only thing that I can say at this point is as it certainly looks as if the buyers are trying to jump in and push this market to the upside, but it’s also going to take a certain amount of Herculean effort to make that happen.
A breakdown below the moving averages could send this market into a major plunge, but after the action that we have seen over the last couple of days, it looks as if the market is going to try to break above that double top that we recently had formed, so if that gets broken, that will have a lot of short covering happening as well, which will only increase the momentum to the upside. Next, we could be very interested due to the fact that we have a potential major breach of resistance, but we could just as easily turn around and fall apart at this point. Wait for it daily close in one direction or the other to give you an idea as to where we are going.
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