NZD/USD brakes higher during the Tuesday session

The New Zealand dollar broke out to the upside, clearing the 0.7250 level before finding resistance again. We have gone back and forth and chopped around in this area to show signs of consolidation and noise in this. I believe that the market should continue to be very difficult to deal with but given enough time I believe that we will eventually go towards the 0.73 level. The 0.72 level underneath should be supportive, and I think that we will continue to see a lot of back and forth type of trading. That type of choppiness will more than likely continue to be an issue, so I would not trade a large position until we get the jobs number of the way on Friday.

If we did breakdown below the 0.72 level, the market could go down to the 0.7150 level. The alternate scenario of course is that we rally and go to the 0.73 level, and a potential break above there could send the market to the 0.7350 level. I believe that in the meantime, you are probably best served by trading small positions and looking at every 50 pips as a potential target or barrier. I believe that the overall attitude of the market could be very skittish due to the geopolitical concerns coming out of the United States and China, as well as equity markets being extraordinarily volatile. I think at this point, you need to be very cautious about trading this market, but if you are nimble, you can take advantage of obvious levels.