NZD/USD Forecast September 20, 2017, Technical Analysis

The New Zealand dollar rallied during most of the session on Tuesday, breaking above the 0.73 level as the Americans came to work. Because of this, the market is likely to continue to try to break out to the upside, as we have seen the US dollar selloff overall. The market looks likely to continue to go much higher, but I think that we will see a significant amount of noise in the near term. I think that the New Zealand dollar is going to continue to be very difficult to deal with, so I recommend small positions as it’s difficult to write this type of volatility. The area near the 0.7350 level continues to be a bit of a barrier, but once we break above there, I think that the market could go as high as the 0.75 handle. It certainly looks resilient in this area, and I have no interest in trying to fight what appears to be a return to bullish pressure.
Commodities
Make sure to pay attention to commodities overall, as this market seems to follow the overall “attitude” of the commodity markets in general, as the New Zealand economy is based on exports. I believe that the market should continue to see volatility, but in the end, I think that the interest rate differential will continue to favor the New Zealand dollar overall, and with the Federal Reserve meeting, there could be a bit of clarity when it comes to what the Federal Reserve will do for interest rates. If the Federal Reserve sounds dovish, it’s very likely that the New Zealand dollar will rally significantly. This is because of hurricane damage and of course the possible headwinds to the US economy as a result. I think the Fed may have trouble raising rates, and I believe that the market is starting to feel the same way.