The New Zealand dollar has been somewhat hesitant to move over the last few days, as we are waiting for clarity from the Middle East.
NZD/USD
The New Zealand dollar has gone back and forth during the trading session here on Tuesday, with a lot of consolidation being the major theme here.
Looking at this NZD/USD pair, we shot higher about 2 weeks ago, and now we’re just sitting here just below the 0.59 level and bouncing around. We are forming what I would look at as a potential bullish pennant, and really what we’re looking at is a potential shot towards the 0.5950 level, because quite frankly, this is a market that is just killing time. And it does make a lot of sense considering there are so many external factors right now that could cause a bit of a headache for many traders.
Geopolitical Headlines and US Dollar Dynamics
After all, the Middle Eastern situation will have a major influence on whether or not the New Zealand economy has enough energy. It is highly sensitive to Asia, the Strait of Hormuz, and everything else.
There are traders out there bringing down the probability that there are going to be interest rate hikes coming from the United States, and that’s part of what’s happened here. But ultimately, we have so much uncertainty out there; I think a lot of traders have just simply decided to step away from the markets. After all, you can just buy Treasuries and get a yield for a few months.
Looking at this, I think we are at least trying to break out to the upside, but there are so many questions out there that it’s difficult. My suspicion is it will be all about the US dollar and how it’s behaving around the forex world and not necessarily have anything to do with the New Zealand dollar itself.
Ready to trade our daily Forex forecast? Here’s some of the best New Zealand forex brokers to check out.
Christopher Lewis is a technical analyst and market commentator at DailyForex with more than two decades of trading experience in Forex and other leveraged markets. Based in Columbus, Ohio, he specializes in chart-based analysis of major currency pairs, stock indices, commodities, and energy markets, focusing on clear support and resistance levels, trend structure, and risk management. Christopher produces daily written and video analysis for traders who rely on technical setups to navigate volatile market conditions
As seen on: Pairs Of Aces Podcast,The Trader Guy, FXEmpire
