NZD/USD Forecast September 13, 2016, Technical Analysis

The New Zealand dollar initially fell during the course of the session on Monday, finding the 0.73 level to be supportive enough. However, we bounced enough to not only show that support, but we formed a hammer as well. This is an area that has been resistive in the past, and as a result it looks very likely that the market will continue to grind its way towards the highs again, which is the 0.75 level. This is an area that has been massively resistive in the past, and as a result it makes sense that should offer support now. Remember that the New Zealand dollar is highly sensitive to commodity markets in general, and as a result it makes sense that we will continue to be somewhat volatile.
Given enough time, we may be able to reach above the 0.75 level, but at this point in time I think that we will probably have to attempt the breakout several times, and with that I believe that it’s only a matter time before each pullback find buyers that are willing to step in and continue to try to grind to the upside. After we move above the 0.75 level, we could reach towards the 0.80 level above there.
I believe that even if we break down below the bottom of the hammer, there is a massive amount of support near the 0.72 level, so it’s not until we break down below there that I would suspect that the market could fall even further, perhaps to the 0.70 level. Ultimately, this is a market that should continue to grind higher though, so I do believe that sooner or later the buyers return and continue to push but it isn’t going to be an easy thing to hang onto. Several short-term buying opportunities may present themselves, so therefore I think short-term traders will probably be well-suited to the long side of this particular market. Hanging onto a longer-term move seems to be a bit far-fetched at the moment, so unless you are willing to “set it and forget it”, short-term trades only.

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