NZD/USD Forecast June 29, 2015, Technical Analysis

The NZD/USD pair fell during the course of the session on Friday, testing the lows again. We had formed a hammer on Tuesday, and we closed just above the bottom of that hammer. Because of this, if we can make a fresh, new low we believe that the market will continue to go much lower, probably heading to the 0.65 level. Looking at the longer-term charts, the 0.6 level has been important in the past, so if we can break down below there we think that the market continues to go lower. On top of that, the members out of the Royal Bank of New Zealand recently suggested that 0.68 was a fair value against the US dollar. It’s funny how the market got right to that point and that bounce.

However, the same central bankers recently have said that the markets are still too high. Since the Royal Bank of New Zealand has a history of jumping into the marketplace that could have trader selling this currency pair yet again. On top of that, the commodity markets on exactly humming along, and demand out of Asia is almost nonexistent in comparison to historical norms. With that being the case, we don’t see any other path down for this pair. Granted, we could get a bit of a bounce but we expect the 0.70 level to be resistive, and we expect that resistance to run all the way up to the 0.72 handle. In other words, we are nowhere near being close enough to a breakout point even consider buying. We think that every time this market rallies, it’s offering value in the US dollar and we will have to treat it as such. There is no way forward for the New Zealand dollar at the moment, although these trends to run out of steam eventually. That being said, we are very long in the tooth when it comes to the string, but there just simply isn’t any reason to think that it will continue for at least a few more months.