- The New Zealand dollar has been a big winner against many other smaller currencies, including the Singapore dollar, which of course is considered to be a safety currency.
- Because of this, the market looks like it is ready to go much higher, and at this point in time it’s likely that the market could go looking to the 200 Day EMA, perhaps even the 0.8150 level above is an important area that we have seen tested multiple times.
In general, this is a market that I think will continue to move on the idea of risk appetite, and as a result it’s likely that the New Zealand dollar will continue to move higher based on the idea that people are continuing to look forward with the Federal Reserve cutting 50 basis points as assigned that perhaps moderate ease and more risk-taking will be the norm. That being said, this is a market that is also very noisy and of course then at times as it is an exotic currency pair.
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On a pullback, we could see a certain amount of support at multiple levels, not the least of which would be the 50 Day EMA, an area that we had broken above. At this point, the market breaking down below there then opens up the possibility of a move down to the 0.80 level, and then eventually the 0.7950 level after that. In general, this is a market that I think continues to see a lot of back and forth.
Risk Appetite
Looking at this pair, I think it gives up and down based on the idea of whether or not people are willing to invest in smaller currencies and markets, as well as whether or not they are looking to stretch out into the commodity markets, as the New Zealand dollar is highly sensitive to commodities as the New Zealand economy is very highly levered to soft commodities, especially when it comes to the idea of Asian demand going forward.
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