NZD/USD Price Forecast January 18, 2018, Technical Analysis

The New Zealand dollar has fallen initially during the trading session on Wednesday, but found enough support underneath to turn things around and show signs of strength again. On the one-hour chart, we are crossing over in the overbought position, which of course is a negative sign, so don’t be surprised if we get a little bit of a pullback. However, if we reach above the 0.73 level, then I think the market continues to go much higher, perhaps reaching towards the top of the longer-term consolidation area, which is the 0.75 handle.

One thing I think you can count on is a lot of volatility, and the market will continue to be just that – volatile. If we break down below the 0.7233 level, then the market probably goes down to the 0.72 handle next, perhaps even lower than that. That would coincide with the major “risk off” event though, so at this point I think that if consolidation typically leads to continuation, it makes sense that the uptrend will continue. Beyond that, we have the commodity markets to pay attention to, as if they are going up, that typically drives demand for the New Zealand dollar to the upside as well. The US dollar seems to be moving in the same general direction, and I believe that the market will probably continue to be the same: showing the US dollar as moving in one direction against almost all currencies around the world. Pay attention to the US Dollar Index, because if it starts to fall again, this pair should rally.

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