NZD/USD Forecast November 1, 2017, Technical Analysis

The New Zealand dollar fell during the session on Tuesday, as we continue to test the 0.68 level underneath. I think that the market continues to find buyers in this general vicinity, but the market finding buyers here should only open up a nice selling opportunity at higher levels. The 0.70 level above should continue to be massive resistance though, as it is a large, round, psychologically significant number and of course has been structurally important in the past as well. If we were to break down below the 0.68 handle, the market could go much lower, perhaps to the 0.65 handle, then the 0.63 handle after that. The market continues to show volatility, but that’s common for the New Zealand dollar. I think that it’s not until we break above the 0.70 level that this market could be bought. I think buying at this level is a bit risky, especially considering that a break above the 0.70 level could send this market as high as the 0.75 level.
A breakdown below the 0.68 level is probably going to coincide with commodity markets falling apart, and then perhaps even overall US dollar strength as interest rates look likely to rise in the United States. If we get some type of selloff in risk appetite overall, that will also put bearish pressure on this pair, sitting us down to lower levels. There is a lot of concern with expanded spending in New Zealand, after the recent election of the new prime minister. There are far too many things lining up against New Zealand right now for me to get involved to the upside, although I can make an argument for short-term traders going back and forth between the 0.69 and the 0.68 levels.