The New Zealand dollar volatile on Monday

The New Zealand dollar initially fell during trading on Monday but turned around after forming a hammer on the hourly chart. The market has broken above the 0.73 level again, and it looks as if we are going to continue to go higher. I think that the 0.75 level above is a target, and I believe that the 0.7250 level underneath is massively supportive. The New Zealand dollar is highly sensitive to risk appetite overall, especially considering the commodity markets are such a major driver of where the kiwi dollar goes. If we were to break down below the 0.75 zero level, the market should then go down to the 0.72 handle, an area that is even more supportive.

I don’t have any interest in shorting this market, but I also recognize that we could get some type of headline coming out of either the United States or China that could shock the markets as well. Markets continue to be very sensitive to words coming out of both of those countries, and that could very well influence risk appetite in general. If that’s the case, the market will course react, and that could put a bit of a drag on the New Zealand dollar. However, if we can get some type of resolution to the situation between the US and China, or even if things are starting to look a bit better, that could be reason enough to cause the pair to rise over the longer term.