The New Zealand dollar fines support during Friday session

The New Zealand dollar broke down initially during the trading session on Friday, reaching down towards the 0.70 level. That’s an area that of course attract a lot of attention as it is such a major figure, and I think that if we break down below there, and make a fresh, new low which is just below, then we should continue to go much lower. The alternate scenario would be that we break above the 0.7050 level, and then the 0.71 level. If we break above there on a daily close, then I think the buyers will jump in and push this market much higher.

I believe that the market breaking down is probably the more likely scenario though, perhaps reaching down to the 0.68 level as it is the bottom of the overall consolidation area. The 0.68 level should be rather supportive, because it is important from the last several years. I think that if we were to break above the 0.71 level though, that could send this market as high as the 0.75 level. Ultimately, this is a market that should continue to see a lot of volatility and of course reactions to risk appetite overall. The New Zealand dollar is very sensitive to both commodity and stock markets, so if we see bullish momentum in those markets, that should send this pair higher. Otherwise, and possibly due to higher interest rates in America, we could see a breakdown.