NZD/USD Price Forecast December 21, 2017, Technical Analysis

The New Zealand dollar has been slightly choppy during the trading session on Wednesday, breaking down below the uptrend line from the weekly timeframe. We are testing that area for resistance, and I think at this point it’s likely that the New Zealand dollar may try to roll over. On a breakdown below the 0.6950 level, then the market is free to go lower, continuing the overall downtrend in the market. The 0.68 level underneath is probably the target, as it was the major support level previously. I think if we can break down below there, the market probably drops to the 0.66 handle, followed by the 0.65 level which is also supported.

The markets will be very illiquid between now and the holidays, with Christmas being on Monday. Because of this, I think it will be very likely that markets will struggle to make a significant move. However, if we get a sudden move, it could be stronger than anticipated due to the lack of order flow, but I think at this point in the year you can take most moves with a grain of salt. I still believe in the downward motion, and I think that selling rallies will more than likely pay off, as the overall outlook for the New Zealand dollar is probably much softer than the US dollar, as we get tax reform coming out of Washington DC now. There are a lot of concerns about overspending coming out of New Zealand going forward, so that continues to weigh upon the market as well. However, if we break above the 0.7050 level, the market probably goes to the 0.72 level next.

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