- The New Zealand dollar has rallied a bit during the trading session on Tuesday, as it looks like we might possibly be trying to form a little bit of a falling wedge.
- This of course is a potentially bullish sign, but I would not get overly aggressive at this point because quite frankly, we don't have enough momentum to justify that yet.
On a Break Higher
And in fact, I believe it's not until we break above the 0.61 level that I would get money jumping into the market. I would follow that move, but I would also like to see the US dollar fall overall.
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On the other hand, if we do drop from here, I think the 0.60 level will have to be very importantly due to the fact that it is an area that previously has been a massive amount of Psychology behind this big figure and for that matter we have seen it react to this price a couple of times If we were to break down below the 0.60 level then the market could go looking to the 0.5850 level.
I don't think right now in this band between 0.60 and 0.61 that there's a lot of decisions to be made other than to simply let the market decide for you. Keep in mind that the New Zealand dollar is highly sensitive to risk appetite and of course Asia and soft commodities.
Let all of those things play out in their own way and then just simply look at this as a potential binary trade. For what it is worth, we are near the 61.8% Fibonacci retracement level, which of course is an area that a lot of people pay attention to.
But so far, we are seeing signs of maybe some type of recovery, but nothing overly convincing yet. Because of this, we are looking for some kind of momentum to simply follow at this point in time. I have no interest in getting involved too quickly – I will let the market decide what I do next.
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