Kiwi dollar rallies during bullish move on Wednesday

The New Zealand dollar has rallied significantly during the trading session on Thursday, reaching towards the 0.70 level, which of course is a large, round, psychologically significant figure. It’s also an area that has acted as both support and resistance, but when I look at the longer-term charts, there is consolidation between the 0.75 level above, and the 0.68 level underneath. That being said, there’s obviously a significant amount of importance attached to a number of like 0.70, as large numbers tend to attract a lot of attention. Since we broke down below that level, we have now rallied to test that level, and it looks like the resistance is trying to hold up.

Beyond all of this, there are a lot of upward pressure is upon the greenback, as there are rising interest rates, and expectations that the Federal Reserve will push rates to the upside. I believe that the market will probably continue to go lower, but I think that the 0.68 level could be pretty significant, as it has been important on longer-term charts several times. I think that the market breaking down through there would be very negative and could unwind this market rather drastically. However, that doesn’t look very likely to happen in the short term, and I think it would take some type of major negative situation around the world to push the market into a significant “risk off” type of attitude. Ultimately, I think we do have further to go to the downside but in a somewhat limited fashion.