New Zealand dollar bounces a bit during Friday session
The New Zealand dollar has rallied during the trading session on Friday, reaching towards the 0.6925 level above, an area that has been resistance. The most recent low is higher from the previous low that we have seen, and I think that support extends down to the 0.68 level, so if we break down below there, the market could unwind rather drastically. We may get short-term bullish pressure, and a break above the 0.6935 level could send this market even higher, but I believe it’s only a matter time before the sellers will jump back in and take advantage of the first signs of exhaustion.
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The New Zealand dollar is significantly oversold to say the least, and therefore this bounce is probably needed. However, if we get some type of exhaustion I will jump right into this market place and start selling the Kiwi dollar, giving us an opportunity to get short of this market for the longer-term. I think that the market could go down to the 0.65 handle underneath. Any rally at this point will continue to find resistance at the 0.70 level, so it’s not until we break above that level that I would be convinced that we could turn things around. If we do that though, it would be a continuation of the consolidation that we have seen for two years. Expect volatility, but I still favor the downside as long as the interest rates in America continue to strengthen.