The NZD/USD pair tried to break out during the course of the week, but turned back around at the 0.76 level. With that, the New Zealand dollar should continue to go lower given enough time and we believe that a move below the 0.75 level since this market looking for the 0.72 level. Ultimately, we believe that the New Zealand dollar will continue to suffer at the hands of the US dollar, and a softer than expected commodity markets. Because of this, we believe that this market will in fact break down, and it will more than likely break down below the recent lows and head to the 0.70 level as well. We think that rallies continue to offer selling opportunities as well, as we see a significant amount of resistance above.

The area above the shooting star shows all kinds of resistance, and as a result we think that it’s not until we get well above the 0.80 level that we can even remotely think about buying. If we do see that, this market should continue to go much higher and at that point in time we feel that it would be a bit of a trend change going forward.

Remember that the Royal Bank of New Zealand has recently stated that the level that they are comfortable with in this particular market as the 0.68 level, as it is now considered to be “fair value.” Ultimately, there will always be the threat of the Royal Bank of New Zealand getting involved in the market yet again, selling off the Kiwi dollar like it did a couple of months ago.

Because of this, we feel that the New Zealand dollar will continue to have a bit of a black cloud above it, and with that we have no interest whatsoever in buying. We believe that both short-term and long-term traders will continue to apply pressure to the Kiwi dollar going forward, and therefore we expect quite a bit of selling opportunities over the course of the next several weeks.



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