NZD/USD Forecast October 26, 2017, Technical Analysis

The New Zealand dollar continues to show of softness, as we have now broken below the 0.69 level. The market looks likely to bounce somewhere in the short term, but the 0.70 level above should offer resistance, as it was previously supportive. The market continues to react to the recent election of a Labour PM and New Zealand, and the fears of overspending. The US dollar course continues to show signs of strength, as the Federal Reserve has made it clear that they are going to raise interest rates. That of course works in favor the US dollar anyway, and in a situation where we are fearful that the Kiwis will start spending rapidly and of course going to quantitative easing, this will continue to weigh upon the market. You should also keep in mind that the AUD/USD pair has been breaking down as well, and the 2 currency pairs tend to move in the same direction over the longer term.
If we do rally from here, I think that any time we get close to the 0.70 level above and form and exhaustive candle, it’s time to start selling again. It’s not until we break above the 0.7050 level above that I would be a buyer, and in the meantime, I think we could go as low as the 0.68 handle underneath which has been important on longer-term charts in this pair for some time. I think there is a significant amount of support there, but if we were to break down below that level, the market should then go down to the 0.65 handle after that. All things being equal, I have no interest in buying, and I think that short-term scalping to the downside should continue to work quite well.