NZD/USD Price Forecast December 27, 2017, Technical Analysis

The New Zealand dollar initially gapped higher at the open on Tuesday, but in the thin environment ended up rolling over to find support at the 0.70 level. This market I think it’s going to continue to be very noisy, as we are testing the underside of an uptrend line that we have broken down below on the weekly chart. In other words, there should be a significant amount of resistance above, but if we can break out above the 0.7050 level, the market could take off to the upside, perhaps reaching towards the top of the overall consolidation area that the market had been in for some time now, which would be the 0.75 level. Otherwise, if we break down below the 0.6975 handle, I think that the market will probably roll over again.

Pay attention to the commodity markets, they certainly influence the New Zealand dollar, and of course we would have to consider that there is a lack of volume this time of year, and that of course can make the market act a bit strange. I would not put too much money into this pair currently, because we are in an area that a lot of questions are going to be asked, and in a thin environment it can exacerbate the move is. Once we get some type of impulsive move, you can follow that, but I think in the meantime you are probably better off taking it slowly, perhaps waiting until after New Year’s Day or the impulsive move and simply sitting on the sidelines until then.

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