NZD/USD Forecast October 30, 2017, Technical Analysis

The New Zealand dollar went sideways during most of the session on Friday, testing the 0.68 level. The market bouncing from there makes sense, as the 0.68 level underneath has been so supportive on longer-term charts. However, I think this bounce is probably a nice selling opportunity given enough time. Ultimately, the market should continue to see bearish pressure, as traders have punished New Zealand for electing a free spending Prime Minister, or at least the perception of having one. That being the case, looks as if the 0.70 level above should now be resistance, as it was previous support. I think that if we break above there, things could change, but in the meantime, it looks as if rallies will continue to invite selling, with the area between the 0.70 level above and resistance, and the 0.68 level being support in the consolidated level that looks likely to happen.
If we break down below the 0.68 handle, then the market is free to go much lower. At that point, the market should then go to the 0.65 level underneath, perhaps even the 0.63 level based upon the longer-term charts. Alternately, if we were to clear the 0.70 level on a daily close, then I think we can rally to the 0.72 level again. In general, I suspect that the US dollar will continue to strengthen, and that the “risk off” attitude could creep into the market as well, which would be a bit of a double whammy for the kiwi dollar. I am patiently waiting for some type of exhaustive candle above the start shorting, and that’s exactly how I plan to trade this market until told otherwise. The commodity markets of course will have their influence as well, so keep that in mind.