NZD/USD Forecast September 7, 2016, Technical Analysis

The NZD/USD pair broke out to the upside during the course of the day on Tuesday, slicing through the top of the shooting star from the Monday session. This is an obvious break out, and it now appears that the New Zealand dollar will reach towards the 0.75 level. Ultimately, I think that the markets will continue to be bullish, based mainly upon the interest-rate differential that we see between these 2 currencies. At this point in time, I feel that the 0.73 level will become the “floor” in this market, and that any pullback will more than likely offer value that people will take advantage of. After all, this is a market that has been pressing up against quite a bit of resistance at the 0.73 level, and now that we are broken above there it’s a bit of the old “submerged beach ball breaking the top of the water” type of scenario that sometimes people used to explain the explosive move higher.
Ultimately, I think that we do break above the 0.75 handle, but that of course has a significant amount of psychological importance. We do get an interest-rate decision coming out of the Australian central bank, and that of course will have a bit of a “knock on effect” when it comes to the New Zealand dollar as the 2 currencies tend to move in the same directions over the longer term. This being the case, the market looks likely to go higher based upon the impulsive move that we’ve seen during the day on Tuesday, but given enough time, we will more than likely get a bit of a pullback. That pullback should offer value though, and I do think that this is the beginning of the bigger move. In fact, I have no interest whatsoever in selling this pair until we get below the 0.72 level, something that looks very unlikely at this point in time, and even more so after the impulsive candle that formed during the day on Tuesday. Because of this, I think that more and more people will be interested.

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