NZD/USD Forecast May 17, 2017, Technical Analysis

The New Zealand dollar has been very choppy during the day on Tuesday, as we continue to bounce around the 0.6875 region. As you can see on the chart, I have drawn what could be a bullish line, so I think that a break above the 0.69 level will be a significant signal to start buying. At that point, I would anticipate that the market would go to the 0.6950 level, and perhaps even higher than that. However, I think that there is a lot of volatility in the short term, so it’s good to be very difficult to hang onto a trade for any real length of time. Also, when it comes to the New Zealand dollar it is the least liquid of major pairs, and that of course has a significant effect as well.

The commodity markets

Pay attention to the commodity markets, they will lead the way for the New Zealand dollar. The New Zealand dollar is highly sensitive to commodity markets as it is a commodity driven economy, so therefore a lot of people will use the New Zealand dollar as a proxy for the overall “attitude” of commodity markets worldwide. I believe that the market should continue to be volatile regardless what happens, but right now I don’t see much in the way of a short opportunity. This is because a move to the 0.6850 level is still within the confines of the flag. Because of this, I think that we either get a breakout, or we sit on the sidelines as it will be easier to go against other commodity currencies than the New Zealand dollar presently. Either way, patients will be needed and smaller position sizes will more than likely be the appropriate way to trade the Kiwi dollar.