The New Zealand dollar falls significantly during the trading session on Friday

The New Zealand dollar has pulled back on Friday, reaching down towards the 0.7350 level, an area that has been support more than once. I think that we will probably bounce from here but remember that this pair is highly sensitive to risk appetite, and headlines coming out from either the United States or China could be a major driver of where this market goes as we worry about trade tariffs. Beyond that, the New Zealand dollar tends to follow commodity markets as well, as the New Zealand economy is so heavily based upon commodities being sent to Asia.

Pay attention to the US dollar in general, because if it continues to sell off I believe that the buyers will continue to push this market higher. We have a lot of noise above that extends to the 0.73 level, so it’s going to be difficult going forward to continue to hold on to long position. However, the current attitude of this market is certainly bullish, and I think that it is foolish to try to fight it. It will take a lot of effort, but I think that eventually we can break above the 0.75 level. If we were to break down below the 0.7350 level, the market probably unwinds to the 0.73 level, perhaps even the 0.7250 level. Ultimately though, I believe that the market pulling back will probably offer value more than anything else.