- During my daily analysis of the NZD/USD pair, the 0.5850 level has come into focus, as we had initially plunged below that level, only to turn around and show signs of life again.
- Because of this, think you got a situation where traders are continuing to look for some type of bottoming this pair, which does make a certain amount of sense considering that the market plummeted from just a couple of months ago.
- After all, during the month of October, the New Zealand dollar had fell just short of breaking above the 0.64 level, and now we find ourselves around the 0.5850 level. That is a huge move in just 2 months.
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Risk Appetite
Keep in mind that risk appetite has a major influence on this pair, as the New Zealand dollar is considered to be a commodity currency, and of course it also is heavily exposed to Asia, which of course needs a lot of risk appetite to continue attracting more money. With this being the case, I think you’ve got a situation where we will have to see how stock markets around the world do in order to get a grip on what might happen with the New Zealand dollar, lease from a short-term perspective. Longer-term, have a lot of questions when it comes to the kiwi dollar, mainly due to the fact that there are concerns with global growth and of course the Chinese economy itself. The Chinese are expected to do some type of stimulus, but the last time they did, it was a bit disappointing.
If the market were to break down below the 0.58 level, then the market is likely to reach toward the 0.57 level for a move lower. Alternatively, if the market were to break higher from here, include the 0.5950 level, that could send the market looking toward the 200 Day EMA, which is closer to the 0.6050 level. All things being equal, I think we see a lot of noise between now and Friday though, due to the fact that we have the jobs number coming out of America.
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