The NZD/USD pair initially tried to rally during the course of the day on Tuesday, but as you can see turned back around to form a bit of a shooting star. The shooting star of course is a very negative candle, and as a result it appears that the sellers are going to take over for at least a while. On this chart, I have the orange dashed line at the 0.6750 level again, and it is an area that I feel is vital to this particular currency pair. I think that there is more than enough resistance in that area to keep this market down, and the fact that we have formed a shooting star for Friday, Monday, and now Tuesday, suggests to me that the market is going to struggle.
Breaking down below the bottom of the candle for the Tuesday session is reason enough for me to start selling again, and I believe the market will probably reach towards the 0.65 handle. It is more than likely going to be a bit difficult for buyers going forward, and as a result I think it is only a matter of time before the sellers gain the upper hand.
Commodities
Commodities are mixed at best, and keep in mind that the New Zealand dollar is very sensitive to the overall “attitude” of commodity markets on the whole. That being the case, the market should continue to show a bit of concern as there is a lot of volatility around the world. That of course is not good for commodities overall, and of course high-yielding currencies such as the New Zealand dollar. I believe that the US dollar will continue to be favored over the New Zealand dollar, but I do recognize that you have to follow the charts, not what you think.
With that being said, I feel if we break above the 0.6750 level the market should continue to go all the way to the 0.70 handle. At that point in time, I am more than comfortable buying this pair as breaking above triple shooting stars is a huge deal.
