NZD/USD Forecast October 6, 2017, Technical Analysis

The New Zealand dollar fell during the session on Thursday after initially treading water. We reached towards the 0.71 level, and that’s an area that of course will attract some significant attention due to the large round number. I think that the New Zealand dollar is most certainly a risky currency, meaning that if the markets are feeling good, it rallies. I also recognize though that the US dollar is considered to be a safety currency, so if the markets are bit skittish, this pair should fall.
I like the idea of buying this pair on dips, but I do not see the stability yet that allows me to do so. I would not be countable in buying and holding, but I also don’t necessarily see a reason to start shorting rapidly either. Because of this, I am more than willing to stay on the sidelines but I also recognize that commodity markets can dictate where this pair goes next. If we continue to see this type of choppiness, we should eventually find buyers who will be attracted to the idea of value. However, this currency is one of the thinnest when it comes to major currency pairs, so keep that in mind, the moves can be substantial and rapid. Longer-term, I do believe in the viability of the New Zealand dollar going higher, but I also recognize that these corrective phases are necessary to continue the longer-term uptrend. I believe that there is a bit of a “hard floor” at the 0.70 level underneath, and if we break down below there, that would change everything as far as this market is concerned. Until that happens, I look at it as a value proposition, and look for it at lower levels and signs of support that I can take advantage of.