- The New Zealand dollar initially gapped lower to kick off the trading session on Monday, turned around to rally, and then gave up those gains rather quickly.
- At this point in time, I think the US dollar continues to beat up on the New Zealand dollar, and we could even be in the midst of forming a potential bearish flag.
We don't know this for sure, but it is something that we need to keep in the back of our mind. That being said, the market is likely to continue to see a lot of overhead resistance anyway, as the Federal Reserve is likely to sit tight for quite some time. And New Zealand has already cut rates. And on top of that is unfortunately overexposed to Asia as goes Asia, so goes New Zealand. And right now, Asia is not going that well.
Top Regulated Brokers
Trade Wars?
The trade wars that are undoubtedly going to be part of the mix going forward, I think is also something that you need to keep in mind as New Zealand is a heavily commodity influenced economy. So therefore, that is a major factor as well. The 0.55 level below could be a bit of a target, while the 0.58 level above could be a major ceiling. 0.5650 seems to be about fair value, which is essentially where we're at right now. I do believe that we probably consolidate going forward, but I also recognize that it is going to be difficult for this market to truly take off to the upside. If and when it does, it won't be until we get a daily close above the 0.58 level that I'm truly convinced that we are going to go much higher. In the meantime, I think we're just looking at a sideways kind of back and forth and fade the rally type of scenario in this market.
Ready to trade our Forex daily analysis and predictions? Check out the best forex brokers in New Zealand worth using.