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NZD/USD forecast for the week of January 2, 2018, Technical Analysis

Christopher Lewis
Updated
The New Zealand dollar had a productive week, as we broke above the 0.70 level, and then tested the 0.71 level after that. Ultimately, it looks as if we are in the middle of consolidation, and therefore I think it makes sense that we continue to the upside.

The New Zealand dollar formed a positive candle during the week, reaching towards the 0.7150 level, before giving back some of the gains. The kiwi dollar has reacted positively to some slightly hawkish comments coming out of New Zealand, after the massive selloff in reaction to the Labour Party being sent into power. When you look at the chart, you can clearly see there is a consolidated area that extends from the 0.68 level on the bottom to the 0.75 level on the top. I think that ultimately, we could go back towards the 0.75 level, but it is going to take some time to get there.

Markets continue to be very noisy and loud, but at the end of the day I think it makes sense that we go back towards the top of consolidation, so if you initiate a position, you may wish to do it slowly, and then simply add every time the market moves in your favor a significant amount. That’s probably the easiest way to play what will be a thin time of the year, but once we get the jobs number out of America, that typically kicks off more in the way of volume. Pullbacks look to be buying opportunities, and it’s not until we break down below the 0.68 level or reach towards the 0.75 level that I’m looking to sell now that we have seen this reaction. Expect volatility, but that’s nothing new with the kiwi dollar.

NZD/USD Video 02.01.18

This article was originally posted on FX Empire

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