NZD/USD Technical Analysis – January 23 2015

The NZD/USD pair went back and forth during the session on Thursday, as we continue to look fairly soft in this market. The 0.75 level below is massively supportive in my estimation, so it does not surprise us that the market could not break down below there. Ultimately, I do think that is the level that the market will have to break in order to start the next leg down, but at this point in time I am fairly confident that we will see that relatively soon.

Because of this, if this market can spin any significant amount of time below the 0.75 level, I am a seller. It is not lost on me that we have formed a shooting star by the end of the European trading session, which of course suggests that a lot of money is leaning on this to the downside. If we can get below the 0.75 level, I believe that this market then will start heading down towards the 0.70 handle. After all, the Royal Bank of New Zealand recently stated that they believe the fair value of this currency pair should be closer to the 0.68 level. I think they will get their wish, or at least something close to that. Commodity markets are very soft at the moment, and the New Zealand dollar of course is very sensitive to those markets.

Any rally at this point in time invite selling as far as I can see, and short-term charts could be used for entries into this marketplace. In fact, right now I don’t really look for buying opportunities as I believe this will continue to be a very soft currency pair going forward as commodities around the world continue to shrink, and the Federal Reserve seems to be the only relatively hawkish central bank.