NZD/USD Forecast June 6, 2017, Technical Analysis

The New Zealand dollar gapped lower at the open on Monday, but then bounced enough to fill that gap. As you would expect, the market then rolled back over, but then found support at the 0.71 handle underneath. Because of this, the market then bounced enough to reach where we gapped down from again. Currently, looks as if we are trying to build up enough pressure to go higher, and move above the 0.7150 level would in fact be a very bullish sign. On the other hand, we could pull back from here, and go looking for the 0.71 handle again. This is a market that should remain volatile in general, because quite frankly the New Zealand dollar is so highly tied to the commodities markets that it is difficult to separate the 2 at times. The commodity markets of course are a mixed bag as far as emotion is concerned, so therefore the New Zealand dollar will continue to be very choppy from what I can see.
Longer-term uptrend
I still believe that buying on the dips will probably be the best way to go with this market, as we continue to see buyers jump back into this market every time it drops. I don’t have any interest in shorting, at least not now, but I do recognize that if we break down below the 0.71 handle, the market could then go down to the 0.7050 level after that. Either way, this is going to be a very choppy situation, and of course will be very sensitive to geopolitical risks that we see currently as the US dollar is a safety currencies, while the New Zealand dollar tends to be thought of as a “riskier” currency. Volatility continues, regardless of which direction we go.
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