NZD/USD continues to bounce around the 0.7250 level

The New Zealand dollar has gone back and forth during the week, bouncing around the 0.7250 level. I think that paying attention to this candle is probably the best way to monitor this market. If we can break above the top of the candle, I think that we will probably reach towards the 0.75 level. A break above that level should send this market much higher, as it is a longer-term signal, and has the New Zealand dollar are looking towards the 0.7750 level, and then the 0.80 level. Alternately, if we break down below the hammer from a couple of weeks ago, we will probably drop down to the 0.70 level. A move below there should send this market to the 0.68 handle.

I believe that it’s probably easier to trade this market on short-term charts, and based upon smaller positions and more importantly, smaller time frames. This market will probably continue to act like this as we have so much in the way of concerns about a potential trade war between the United States and China, and of course New Zealand exports many of its agricultural products to China. I think that the market should continue to be noisy in general, but it seems to be favoring the upside. However, a few choice words out of either China or the United States could turn that around rather quickly. Expect noisy and difficult trading conditions, perhaps favoring short-term trading more than anything else. I would keep my position size small as well.