The New Zealand dollar initially tried to rally this week, but the 0.7350 level has offered too much in the way of resistance. Because of this, I believe that the market is going to continue to chop around, with perhaps the 0.72 level offering enough support to turn things around. I think that the market participants will continue to focus more on global issues than anything else, and I believe that this is going to be a “risk on/risk off” situation. Because of that, I think that the market will be a highly sensitive market to things like the potential trade war that the US could kick off. If it does, it’s likely that the New Zealand dollar will suffer at the hands of commodity markets selling off. Alternately, if we get more of a “risk on” move, we could find that the market is ready to continue to go higher, perhaps reaching towards the 0.75 level above, which has been so important in the past.
NZD/USD Video 19.03.18
If we were to break above that level, then it becomes more of a “buy-and-hold” scenario. I recognize that this pair is going to continue to be very choppy, so I believe that keeping a small position size is probably going to be the most important thing you can do. Ultimately, expect a lot of noise in one of the noisier major currency pairs.
This article was originally posted on FX Empire
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