New Zealand dollar takes off during Wednesday session

The New Zealand dollar rallied significantly during the trading session on Wednesday, reaching towards the 0.70 level above which is a major psychological barrier. If we can break above the 0.70 level, the market would be free to go much higher, but I think it is can I think a significant amount of momentum to have that happen. After all, we did rally rather stringently and ridiculously fast during the day on Wednesday, as there was a huge “risk on” move for reasons that are yet to be clear. I think that the market simply had a technical move more than anything else, and that this pair being as illiquid as it is at times was a perfect candidate for that. I anticipate that this market will continue to favor the downside as we have yet to test the 0.68 level significantly, and of course there’s always the odd geopolitical issue out there to be concerned with. I think that eventually the buyers will give up based upon exhaustion, and that we should get a nice exhaustive candle near the 0.70 level to start shorting again. However, we have yet to see that, so I would be cautious and on the sidelines right now as buying at this point would be chasing the trade.

The alternate scenario is that we break above the 0.70 level on a daily close, which of course would be very bullish and could send this market as high as 0.72 over the next several sessions.