NZD/USD Forecast May 5, 2017, Technical Analysis

The New Zealand dollar fell hard during the session on Thursday, as we prepare for the jobs number. This of course is a significantly bearish event as it shows that commodity markets will continue to be beaten up. After all, one must remember that a major driver of the kiwi dollar is the overall attitude of commodity markets in general. I believe that short-term rallies should continue to offer selling opportunities, and that we will probably reach towards the 0.68 handle. If we can break down below that handle, the market should continue to go much lower. Rallies offer value in the US dollars far as I can see and with the jobs number coming out today, one thing that I think you can count on is going to be volatility in a market that tends to be volatile anyways.
Follow the futures markets
Futures markets in general affect the kiwi dollar, but there isn’t a necessarily direct correlation between any one market. You could go out on a limb and look for some type of correlation between milk futures and the New Zealand dollar, but quite frankly that is a little bit of a stretch as the market itself isn’t that liquid. Ultimately, I believe that the overall attitude of a basket of commodities may be the best way to get an idea as to how traders will feel about the New Zealand dollar. I believe that we have already stated what we feel, so I look at rallies as an opportunity to get short again. If we managed to break above the 0.69 level though, that would change my attitude and I believe that the market would probably start to form bullish pressure that may follow through and go higher.