NZD/USD Forecast May 9, 2017, Technical Analysis

The New Zealand dollar initially gapped lower at the open on Monday, but found enough support at the 0.69 level to turn things around and bounce about 50 pips. Ultimately though, we found the sellers jump back into the market and now it appears that the volatility will continue. I believe that the 0.69 level will continue to be important, but if we can break down below the 0.6880 level, I think that the market will then go looking for the 0.6850 level. This is a market that continues to struggle a bit, as the commodity markets have been quite messy as of late. After all, the New Zealand dollar is very sensitive to commodities in general and the way that the trading public “feels” about various commodity markets.
Longer-term softness
I think there is still a certain amount of longer-term softness in this market, and believe that the selling could pick up longer term. Having said that, I recognize that the 0.69 level has a certain amount of support and significance, so that is where I make my longer-term decision. As mentioned previously, the 0.6880 level would show that the market is broken, and that the sellers are starting to come back in with a bit of a vengeance. Alternately, if we could get above the 0.70 level, that would change my longer-term outlook, but right now I don’t think it’s likely that the markets will suddenly rally. Pay attention to the overall attitude of precious metals and agricultural markets, because they can sometimes give us a little bit of a “heads up” on what happens with the kiwi dollar. The volatility should continue to be a major factor in this market, so you should be able to deal with choppy conditions if you want to be involved.