NZD/USD Forecast October 5, 2017, Technical Analysis

The New Zealand dollar had a very volatile session on Wednesday, breaking out to the upside and reaching towards the 0.72 handle. Ultimately, this is a market that continues to be very difficult to navigate, and even with the massive amount of bullish pressure that we had seen early in the session, we rolled over to test the bottom again. The 0.7150 level continues to be supportive, so I think that we will probably bounce from there. However, if we were to break down below that level, we should then test the 0.71 handle. That area should be even more supportive, perhaps offering even more bullish pressure. Ultimately, I think that this market will move with the overall risk appetite of the markets, as it typically does.
A break above the 0.72 level should send this market towards the 0.75 level given enough time. Ultimately, this is a market that continues to be very choppy, so I would recommend using small positions, or perhaps trading options. Longer-term, I do think that we break out to the upside, and a break above the 0.75 level should send this market towards the 0.78 level. A breakdown below the 0.70 level should send this market much lower, but I don’t think it’s going to happen due to the bullish pressure that we have seen underneath. Obviously, this is a market that is going to be very noisy, so please keep that in mind and therefore be careful. You would not be wrong for sitting on the sidelines, as the New Zealand dollar doesn’t seem to have a lot of clarity based upon will we have seen over the last several sessions. Given enough time though, I do think that the buyers will return if the financial markets retain their proclivity for risk appetite.