NZD/USD Price Forecast January 26, 2018, Technical Analysis

The New Zealand dollar went back and forth during the trading session on Thursday, calmed down after the massive selloff on Wednesday. I think there is still quite a bit of bullish pressure underneath, because if nothing else we have the US dollar softening in general, and of course the New Zealand dollars considered to be a “risk asset.” Right now, it appears that animal spirits are high, so that tends to bring people into this market to the upside. Pullbacks look to be buying opportunities, and I think that the 0.73 level is going to offer support based upon the recent clustering in that area.

Above current trading, I see the 0.75 level as a major target, but I also see it as a major resistance barrier. If we can break above that level, then we can go much higher. At that point, I believe that the market will probably go looking towards the 0.77 handle. There’s a lot of volatility in this market, but that is typical for the New Zealand dollar, so I look at these pullbacks as opportunities to pick up and add to a longer-term core position. Because of that, I plan to add on the dips, and incrementally so I can build up a larger position. I believe that the US dollar is going to continue to soften this year, and the New Zealand dollar will be one of the major beneficiaries as it is one of the least liquid major currency pairs.

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