NZD/USD Forecast July 18, 2017, Technical Analysis

The New Zealand dollar fell significantly at the open on Monday, but found enough support near the 0.7320 level to bounce a bit. However, on the way back up we struggled at the 0.7350 level, which is a bearish sign, considering that it was lower than the previous high. In fact, on the hourly chart the previous 4 highs have all gotten lower. Having said that, the lows are not going lower. So, with that I think we are continuing to grind and try to figure out the next move. I believe that we are trying to break out to the upside, and quite often that takes several attempts to come to fruition. Once we do, the market should then go looking for the 0.75 handle. After all, the New Zealand dollar has been a strong performer, so perhaps we need to grind sideways to build up the necessary momentum to make the next move.

US dollar

I think the biggest part of this equation is the US dollar. Recently, it has been sold off rather drastically, especially considering that traders are now starting to question whether the Federal Reserve can raise interest rates in the same manner they once had suggested. If that’s the case, then obviously there needs to be a certain amount of repricing as the US dollar will become a funding currency again. I think that this pair will continue to be volatile, but I suspect that we are much more likely to go looking for the 0.75 level rather than the 0.72 level. Small positions that you can add to as you profit is probably the best way to approach this market, as the volatility will almost undoubtedly continue to be a major input when it comes to the market performance.

NZD/USD Video 18.7.17