- The New Zealand dollar has shown itself to be a little bit resilient during the trading session on Thursday after forming a couple of shooting stars.
- This is a very interesting currency pair to me because it obviously represents risk appetite.
- But at the same time, we’ve recently seen the Central Bank of New Zealand cut rates. It is expected that the Federal Reserve will cut rates as well.
And that’s part of what we’re seeing here in the form of the New Zealand dollar trying to break above those two shooting stars. The question, of course, is whether or not we actually can. We’ll just have to wait and see if that actually ends up being the case. But over the longer term, I think you’ve got a situation where you could very well look at this through the prism of a market that is essentially a representation of Asia, and the United States, after all, one of the biggest problems that New Zealand will have is that it is almost solely reliant on China and larger Asian economies for its exports.
If the United States is in fact slowing down, and it looks like it might be, that is going to have a detrimental influence on the Asian economy eventually. So, I think this is an interesting pair.
The Major Level Above
The 0.60 level above is a swing high and a large round psychologically significant figure that people will be watching. And therefore, if we can break above there, I think that opens up a move to the next handle, the 0.61 level. Any breakdown at this point in time, we’ll have to deal with the 0.5850 level as potential support. Both the 200 day EMA and the 50 day EMA are essentially flat.
So that tells you that the market is somewhat in balance. But I think when you look at the totality of this pair, it’s obvious that we’re in a larger consolidation area. And the 0.60 level would essentially be the middle of it.
Ready to trade our daily Forex analysis? Here’s a list of the brokers for forex trading in New Zealand to choose from.
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
