NZD/USD Forecast May 19, 2017, Technical Analysis

The New Zealand dollar fell during the day on Thursday, as we found the 0.6950 level to be a bit too resistive. Ultimately, the 0.69 level underneath looks to be supportive just as the 72-hour moving average does as well. I believe that the market will probably continue to find buyers underneath, as we have been rallying for some time, but expect a lot of volatility. As you can see, we had a bullish flag form and then breakout, but it has been very choppy in general as the headlines continue to knock the markets around as the worlds traders try to get a handle on risk. Remember, this is a pair that tends to move on risk appetite, and if risk appetite picks up, it could go higher. Alternately, it is also going higher due to a lot of the concerns out of Washington DC, which has been weighing upon the US dollar.

Commodities

The commodity space of course has a lot of influence on the New Zealand dollar, and the New Zealand dollar continues to be a bit of a barometer on the attitude of futures markets. If the market can break above the 0.6950 level, we could go much higher. I would expect the market to go testing the 0.70 level after that as it is the next large, round, psychologically significant number. It is also a historically important figure as well, so I believe that given enough time we will test that area. Alternately, if we break down below the 0.69 handle, the market will probably continue to fall. I think the one thing you can count on is a lot of noise, so therefore it can be very difficult to trade the New Zealand dollar. Smaller positions might be warranted.