NZD/USD Forecast October 27, 2017, Technical Analysis

The New Zealand dollar initially went sideways on Thursday but then rolled over again, reaching down towards the 0.6850 level. We have been in a bearish market for some time, but it appears that we are starting to slow down the dissent of the value of the Kiwi, so I think waiting for rallies to sell will probably be the best way to look at this market. Somewhere near the 0.6870 level, I expect to see resistance, and that of course at the 0.69 handle. The market continues to favor the downside, and I think ultimately will go looking towards the 0.68 level underneath. The market continues to be very volatile and choppy, but I think that the overall attitude should remain bearish, least in the short term. The 0.68 level underneath is massively supportive, so it will be interesting to see how things play out then.
If we were to break down below the 0.68 level, the market should then reach down to the 0.65 handle, which is the next major support level on longer-term charts. I think that we will continue to see negativity in a market that is certainly struggling with the overall risk appetite picture and of course the election of what is a free spending prime minister in New Zealand, so I think adding that to the fact that the Federal Reserve is likely to raise interest rates over the next several months, it makes a lot of sense that the New Zealand dollar continues to sell off. Is it oversold? Yes, it probably is. However, the longer-term trend certainly dictates that selling is the only thing you should be looking to do. If we did break above the 0.70 level above, then I would rethink things, but right now it doesn’t look likely.