New Zealand dollar falls through another handle on Tuesday

The New Zealand dollar initially try to rally during the day on Tuesday, but then broke down below the 0.69 level. By doing this, it looks as if the market is trying to break down significantly, and I believe that it’s only a matter time before the pair drops down to the larger consolidation support level at the 0.68 handle. I believe the 0.69 level above should offer resistance, extending to the 0.6925 level. If we were to break above the 0.6925 level, then the market could go higher. However, I don’t have a lot of confidence in the New Zealand dollar, as it has been very soft. I believe that the market continues to drop drastically, but in quick spurts, not necessarily a longer-term trade as we don’t have as far to go to the downside as we could risk to the upside.

If we did break above the 0.6925 handle, then the market probably goes looking towards the 0.70 level above, which has a lot of psychological importance. If we broke above there, the market should continue to go much higher, but I think that the likelihood of that happening is a bit slim at this point, and I think that the overall attitude of this market continues to favor the greenback as it is more than likely going to be a strong summer for the US dollar. Ultimately, expect volatility but with a negative twist.