New Zealand dollar has volatile session during the Tuesday session

The New Zealand dollar rallied a bit during the beginning of the session on Tuesday but pulled back from the 0.7050 level. We have reached towards the 0.70 level underneath, and that’s an area that has been important in the past due to resistance. It is a large, round, psychologically significant figure, and it will attract a lot of attention. Market participants continue to look at this as a “risk on/risk off” trade, and I believe that the market will continue to be very noisy to say the least. I think eventually the market will continue to go higher, but if we were to break down below the 0.6950 level, the market could break down rather significantly. At that point, I think the market probably goes down to the 0.69 handle, and then possibly even the 0.68 level which is the major support level based upon longer-term charts.

However, we have seen such a significant turnaround and of course the market seems to be calming down due to the situation in Italy calming down, and of course the only somewhat minor escalation in the trade wars, which of course is good to the New Zealand dollar as it is considered to be one of the quickest ways people play risk appetite. I think that the market continues to be very noisy, but in general I think that we are going to try to grind towards the 0.72 level now that we have made this huge bounce.