NZD/USD forecast for the week of November 23, 2015, Technical Analysis
The NZD/USD pair initially broke down below the 0.65 level during the course of the week, but turned back around and formed a hammer. The hammer of course is a very positive sign, so if we can break above the top of the hammer, the market will more than likely reach towards the 0.6750 level, where we see quite a bit of resistance. At that point in time, we would love to see some type of resistive candle in order to start selling again. On the other hand, if we break down below the bottom of the hammer, that is a very negative sign as well, sending this market much lower.
You have to keep in mind that the New Zealand dollar is highly sensitive to several things. One of the most important things of course is risk appetite around the world, which seems to be a bit shaky at best. Ultimately, if you keep in mind that the US dollar continues to strengthen overall as well, so it is very possible that we break down from here. At this point in time, it’s not until we get above the 0.70 level that we are comfortable hanging onto a longer-term trade though. If we do, the market should then reach towards the 0.80 level given enough time.
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Ultimately, if we break down below the bottom of the hammer for the week, we feel that the market then should reach towards the 0.6250 level below, and then perhaps the 0.60 handle. Keep an eye on the commodity markets in general, as they will have a direct effect on the Kiwi dollar.
You also have to keep an eye on the stock markets, as they are a great barometer for risk appetite. Currently, it does look like we are willing to go a little bit higher, but it seems to have a theme based upon the US dollar itself. It’s more or less a situation where interest-rate simply do not allow the stock markets to go down for any significant amount of time. That being the case, until we get some type of impulsive move to the upside in the stock markets, it’s probably difficult to imagine that the New Zealand dollar itself will be strong.