New Zealand dollar slices around during the Wednesday session

The New Zealand dollar has gone back and forth during the trading session on Wednesday, pressing around below the 0.69 level. This is an area that is psychologically important and has had a bit of reaction as of late, but I don’t think it’s major. I believe that the major support is closer to the 0.68 handle, which is the bottom of the overall consolidation. This has been important over the last several years, so if we were to break down below that level the New Zealand dollar would unwind rather drastically. I believe that the market breaking below that level could open the door to the 0.65 level, but it’s very unlikely to happen quickly. I think that the 0.68 level will put up a significant fight, as we have bounced from the 0.6850 level recently.

I believe that the 0.70 level above is resistance, and it will continue to be in the foreseeable future. If we did break above there, it would be a very positive sign. With the US dollar spiking the way it has, it’s likely that the downward pressure should continue. I believe that the bond markets unwinding in the United States will of course will send interest rates higher, which should send the US dollar in the same direction. I don’t see and into this, at least not in the short term so I think it’s only a matter of time before we get involved and start going to the lower levels below.