NZD/USD Forecast May 3, 2017, Technical Analysis

The NZD/USD pair had a very volatile action during the day on Tuesday, as we consolidate it just above the psychologically important 0.69 handle. In fact, we have been in a very tight range, with the highs being close to the 0.6935 handle, meaning that the market just has not made much of a move. Because of this, I don’t have any interest in trying to play a longer-term trend, and quite frankly will be interested to see how the 0.69 level holds up. I prefer shorting the market underneath that level if we can get there, but in the meantime, I recognize that we probably have a lot of chopping around to do. With this being the case, I’m more than likely going to stay on the sidelines and although I recognize they move above the 0.6935 level would be short-term bullish, I am not willing to take that long position.
A breakdown below the 0.69 level sends this market looking to the 0.6850 level underneath, which had been rather supportive. Ultimately, I think that this market might be best left alone during the session today, at least until we can get some type of clarity in the chart. We are obviously in a downtrend, and I do favor that overall but recognize that the last couple of sessions have thrown some doubt into the downward pressure. On the longer-term charts, it looks as if a breakdown from here could send this market towards the 0.65 handle, but that of course is going to take a long time to reach down to, and this is a market that could offer plenty of selling opportunities on short-term charts, but I’d like to see an impulsive move first in order to take advantage of those.
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