The NZD/USD pair did almost nothing during the session again on Thursday as the pair seems to be pretty much comfortable at the 0.8550 handle. This area begins a significant amount of support though, and as a result it doesn’t really surprise me that we can’t find any movement one way or the other for any great length of time. In fact, I think it’s only a matter of time before the buyers step in and pushes market higher, because I recognize how important at the 0.85 handle has become.
When you look at this chart, it’s not hard to notice that we were in an uptrend and we simply gone sideways. New Zealand dollar will do that from time to time, as it likes to make impulsive moves and then consolidate. While that can be said about most other currency pairs, in the New Zealand dollar it seems to be exacerbated.
Watch risk and commodities.
I was try to keep an eye on risk from time to time, as the New Zealand dollar certainly seems to be influenced by overall risk. That being the case, it’s probably only a matter of time before we get a significant move in one direction or the other, and with that we are relatively likely to bounce from here as there is so much support below. In fact, I believe that the support extends all the way down to the 0.84 handle, which means of course that there is a time of it. In this significant area, I think that a supportive candle would be an excellent buying opportunity and in a sense a bit of a no-brainer type of trade. It doesn’t mean that it will work 100%, but rather that the odds are most certainly with you.
Going forward, I still expect to see the 0.90 level targeted, and should be had some time between now and the end of the year. I would even venture to say that it would probably be closer to the end of the summertime, but with the summertime, a lot of times liquidity becomes issue, and that’s especially important in this particular pair.
