- The New Zealand dollar has pulled back slightly during the trading session on Tuesday, as we continue to hang around the 0.61 level.
- This is an area that has offered quite a bit of support, and of course we have the 50-Day EMA sitting there, right along with the 200-Day EMA indicator.
In other words, this is a market that I think has a lot of noise attached to it, but quite frankly, at this point in time I’m not even sure what’s driving this pair (NZD/USD). I think more than anything else, this pair is suffering the same fate as the Australian dollar, as we just don’t have any clarity coming out of the Federal Reserve.
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The 50-Day EMA of course offers quite a bit of support, right along with the 200-Day EMA indicator. Both of these indicators attract a lot of attention, so if we were to break down below there, then I think we would be testing the 0.6050 level, an area that previously had been support, and of course resistance. With this being the case, I think that you would be setting up a bigger move. Anything below there could send the New Zealand dollar dropping down to the 0.5850 level, which was a rather massive support level.
If we turn around a break above the 0.6150 level, then it opens up the possibility of a move to the 0.62 level. The 0.62 level is a large, round, psychologically significant figure that a lot of people have been paying close attention to, and it has offered a significant amount of resistance in the past. If we can break above there, then the market is likely to continue to go looking to the 0.6350 level.
Keep in mind that the New Zealand dollar is highly sensitive to risk appetite, and of course what commodities are doing. New Zealand is a little different than Austria in the sense that it will be soft commodities and not necessarily hard commodities, but at the end of the day, they all tend to move in the overall same direction. New Zealand is also highly exposed Asia, so you will have to pay attention to how Asian markets are behaving.
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