New Zealand dollar choppy during the week

The New Zealand dollar went back and forth during the week, essentially settling on doing nothing. The market looks likely to find support at the 0.68 level underneath, as well as resistance of the 0.70 level after that. Now that the market has gone back and forth like that, I think that it shows that we are in the process of trying to decide where to go longer-term. Short term, I believe that the attitude in this market will continue to be a bit confused, as there are a lot of geopolitical risk out there that will drive currency markets overall. The New Zealand dollar of course is very sensitive to commodities, while the US dollar is the first place people go to when they are worried about geopolitical situations.

There are plenty of things to worry about, not the least of which will be North Korea, Syria, and a potential trade war. I think that the market will continue to be very noisy, but if we were to break above the top of the candle, we could get a bit of a relief rally, perhaps even as high as 0.74 over the next several weeks. Otherwise, if we break down below the 0.68 handle, the market probably reaches down to the 0.66 level. I expect a significant move eventually, but the next couple of weeks may be more of this type of noisy environment. When I look at this chart though, it’s easy to see that we have been in consolidation for a couple of years. Something like that doesn’t change very quickly, and that something that you should always keep in mind.