NZD/USD Price Forecast February 7, 2018, Technical Analysis

The New Zealand dollar has been very noisy over the last couple of sessions, as it looks like the 0.73 level is going to be an area of contention. I think that the market can rally, but we need to see more of a “risk on” attitude around the world, and this will first show itself in the stock indices that we follow here at Eracash. The stock market is one of the easiest ways to determine risk appetite, as they will rally when people are comfortable, and therefore people will start to buy other currencies be on the US dollar, such as the New Zealand dollar as it is highly leveraged to risk appetite.

The alternate scenario of course is that we continue to see global selloffs and break down significantly below the 0.7250 level in this market. If we do, then I think we will challenge the 0.72 level, and then eventually the 0.70 level after that. Obviously, that large, round, psychologically important number will attract a lot of attention, and therefore should be an area where we see quite a bit of noise.

There is a longer-term resistance barrier at the 0.75 level that is going to be difficult to overcome, but once we do I think that the New Zealand dollar suddenly becomes more of a “buy-and-hold” scenario. I think this happens later this year, but obviously will be waiting for that opportunity before building a huge position.