The New Zealand dollar has rallied over the last couple of weeks, forming a “V bottom.” That being said, we have also seen a lot of exhaustion over the last couple of days, and it now appears that we are likely to break down due to the fact that the 0.6450 level has been so difficult to overcome.
The shooting star from the Monday session is a hint that we are ready to break down as well, and the fact that we are forming a rather negative looking candle stick for the Tuesday session only confirms this. The 50 day EMA is above, and likely to continue to grind lower and offer a certain amount of dynamic resistance. Furthermore, the US/China trade talks continue to drag on and although they are talking soon, there are still the occasional headline or comment out there that shows just how far apart the two countries are. Simply put, there will be no agreement anytime soon and these rallies like this are probably either short covering, or algorithmically driven.
To the downside, it’s very likely that this pair goes looking towards the 0.63 level as long as we stay below the 50 day EMA just above. If we were to break above the 50 day EMA, then we could go to the 0.65 level, which of course is a large, round, psychologically significant figure that will attract a lot of headline attention. However, I think it’s very unlikely to happen until we get some type of very bullish news as far as risk appetite is concerned. Overall, this market is a market that is highly sensitive to risk appetite, and risk appetite does in fact seem to be rolling over during the Tuesday session. Ultimately, we are still in a very negative downtrend.
The shooting star from the Monday session is a hint that we are ready to break down as well, and the fact that we are forming a rather negative looking candle stick for the Tuesday session only confirms this. The 50 day EMA is above, and likely to continue to grind lower and offer a certain amount of dynamic resistance. Furthermore, the US/China trade talks continue to drag on and although they are talking soon, there are still the occasional headline or comment out there that shows just how far apart the two countries are. Simply put, there will be no agreement anytime soon and these rallies like this are probably either short covering, or algorithmically driven.
To the downside, it’s very likely that this pair goes looking towards the 0.63 level as long as we stay below the 50 day EMA just above. If we were to break above the 50 day EMA, then we could go to the 0.65 level, which of course is a large, round, psychologically significant figure that will attract a lot of headline attention. However, I think it’s very unlikely to happen until we get some type of very bullish news as far as risk appetite is concerned. Overall, this market is a market that is highly sensitive to risk appetite, and risk appetite does in fact seem to be rolling over during the Tuesday session. Ultimately, we are still in a very negative downtrend.