NZD/USD Price Forecast February 5, 2018, Technical Analysis

The New Zealand dollar fell significantly during the trading session on Friday, perhaps in profit-taking, or perhaps in reaction to the strengthening US dollar overall after the jobs number showed that America gained 200,000 jobs during the month of January. This is typically a very seasonally weak time of year, so it’s likely that the number will have had people looking towards America as a beacon of hope economically. If we get more of a “risk on” attitude longer-term though, that should help the New Zealand dollar, especially as it is so sensitive to commodity pricing.

The 0.73 level is trying to offer a bit of support right now, so we will have to see whether it holds. If it does not, the market probably goes looking towards the 0.7250 level, and then eventually down to the 0.72 handle. That’s an area where I would expect to see even more support, and a break below that level would lead to much lower trading. In the meantime, I look at this as simple consolidation between the 0.73 area and the 0.74 area, with very sloppy boundaries. A break higher should send this market to the 0.75 level which is massively resistive, as it has been the top of consolidation for at least the last year. If we can clear that level, that would have the New Zealand dollar going much higher of the longer term, and then eventually towards the 0.80 level. I would probably add on dips if we made that breakout, but right now it doesn’t look like we’re going to in the short term.

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