NZD/USD Forecast May 25, 2017, Technical Analysis

The New Zealand dollar had a bumpy road on Wednesday, initially falling down to the 0.6990 level, but then bounced enough towards the 0.7040 level before falling again. I believe that we will continue to see volatility in this pair, as there are a lot of concerns when it comes to commodities. Also, the New Zealand economy is highly leveraged to commodities, so if they roll over, the New Zealand dollar typically will roll over. As you can see on the chart, I have that 72 hour exponential moving average, and it’s not until we break down below there that I would be comfortable selling. The market will probably continue to be very erratic as we are concerned about several issues at the same time. We of course have a bit of concern when it comes to geopolitical situations, and of course global demand.
Nimble trading will be necessary
I believe that Neville trading will be necessary and therefore is going to be difficult to trade this market for any type of longer-term trade currently. If we can break down below the aforementioned 72 hour moving average, the market should then go down to the 0.69 handle. The most recent high was lower than the previous one, so I think we are starting to see strains in the market. Ultimately, it’s not until we break above to a fresh, new high that I’m comfortable buying but I do recognize that we may have bounces in this market from time to time. With that being the case, I have more of a downward bias but I’m going to use the 72 hour exponential moving average as a trigger to get involved in this market to the downside. Until then, it’s probably best be on the sidelines.