NZD/USD Forecast May 24, 2017, Technical Analysis

The New Zealand dollar initially tried to rally on Tuesday, but rolled over and now as I write this is starting to reach towards the 0.70 level. Simply put, if we do not hold this area I think the market roles over significantly as we are starting to form a shooting star on the daily chart. With this being the case, on a breakdown below the 0.6980 level, I believe that the New Zealand dollar rolls over and start looking for the 0.6925 handle after that. Alternately, if we can break above the high for the session, that’s a very bullish sign as one would expect, and probably have this market looking for the 0.7250 level. Either way, this is a market that will be very volatile as we are seeing an extraordinarily shaky market. The New Zealand dollar tends to be very sensitive to commodities, so pay attention to the overall attitude of those markets as it should drive where we go next.
Decision imminent
I believe that this market is getting ready to make a serious decision, so I’m willing to place a trade based upon either the breakout above the top of the daily range or breakdown below the 0.6980 level. I think that this is especially interesting considering that the Australian dollar is doing the same thing, and the 2 currency pairs tend to move in the same direction. Because of this, I like the idea of trading the breakout and believe that it should be a reasonably reliable signal. I will say this though: it’s probably easier to fall at this point that it is to continue going higher as there is a lot of noise just above. Either way, we should get answers to serious questions rather soon.