The NZD/USD pair fell during the session on Thursday, but as you can see found enough support just around the 0.82 handle in order to bounce and form a hammer like candle. As a reasonably looking supportive candle and as a result I think that this market will continue to consolidate between the 0.82 level, and the 0.84 level. That simply is a return to the "status quo”, if we do get a bounce from here, and quite frankly, I believe that the risk in going long at this point time is worth it.
There is a gap down at the 0.8150 level, which should cause buyers to step into the marketplace and push his market higher even if we do break down a little bit from here. I don't know whether or not this is anything more than a short-term trade, but quite frankly it makes sense to see a quick 200 pip pop or sell from this area as we have seen it happen over and over again.
Remember, the Kiwi is highly sensitive to risk appetite in the commodities markets.
The Kiwi dollar is a bit interesting, and the fact that it is highly sensitive to commodity markets in general, and not any one specific market. That being the case, simply watch the overall markets, and buying the Kiwi dollar if they seem to be doing fairly well. Although the New Zealand economy is highly agriculturally driven, the fact is that any strength out of Asia in general will push the New Zealand dollar higher.
Whether or not we can break above the 0.84 handle might be a completely different matter, but even if we do I think that the 0.85 will be a bit tough to break above. If we can do that, we could really take off to the 0.90 handle, but I think it's going to take something rather significant in order to push the market that high. As for selling is concerned, I will not hesitate to do so.
