- The NZD/USD pair has rallied quite significantly to reach towards the 0.63 level, an area that has been a major resistance barrier more than once.
- All things being equal, this is a market that if we break above there it could mean something rather big.
- However, there are a lot of things moving at the same time here, and I do think that you need to keep an idea in the back of your head that perhaps there are going to be plenty of people out there willing to buy on the dip.
All things being equal, this is a market that continues to see a lot of questions asked about the US dollar, and of course the overall attitude of the US central bank. The Federal Reserve had cut rates by 50 basis points last week, and therefore it suggests that the market is going to continue to see the US dollar fall, due to the fact that the market that the interest rate differential will continue to favor the New Zealand dollar, and of course the idea that commodities are going to be more aggressively rally and value, as typically happens in a highly inflated environment.
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Major Ceiling Above
There is a major ceiling above in the form of the 0.63 level, but if we break above there then I think you get a big “FOMO trading”, and at that point in time you would likely see quite a bit of damage to the US dollar in general. All things being equal, the NZD/USD market is a one that continues to be very noisy, and if we do drop from here, it’s likely that we would see a lot of plenty of value hunters willing to come in and restores the 50 Day EMA underneath. The support near the 0.61 level will continue to be important as well, with the 200 Day EMA coming into the picture also.
On the other hand, if we do break above the ceiling, the “FOMO trading” will probably see the US dollar gets crushed against almost everything, not just this particular currency. Quite frankly, all of the moves that we are seeing right now are all about the US dollar and nothing else.
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