Expect a lot of noise in this market, but it does look like we are trying to make a statement to the upside. The area has a lot of crosswinds at it, namely the 0.6750 region, mainly because there are concerns about the US/China relations, the overall global growth story, and higher interest rates in America. However, the market may have been a bit oversold so it’s possible that we may have buyers underneath looking to pick up a bit of value. Beyond that, as we head into the weekend I think a lot of people will be willing to take on major positions, so it’s possible that the markets may to simply sit here for a minute.
NZD/USD Video 12.11.18
The New Zealand dollar of course is somewhat sensitive to China, but not so much as the Australian dollar. I think that the market is perhaps trying to get ahead of any potential deal between the Chinese and the Americans or perhaps even good signs of a little bit of progress. Ultimately, this is the bounce that a lot of traders have been waiting for, and if we can get some type of “risk on rally”, that could help the Kiwi dollar as well.
The 0.65 level underneath is massive support, at least so far so if we were to break down below that level it would be very negative for the Kiwi dollar. We are at extreme lows at this point though, so it doesn’t surprise me that we have seen a bit of a bounce. If we can continue to go higher, I think we will target the 0.70 handle.
This article was originally posted on FX Empire
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