- During the trading session on Friday, we have seen the New Zealand dollar break much higher.
- In fact, it is clear to resistance, and it now looks like it has its sights set on the next major resistance barrier, in the form of the 0.58 level.
- Clearing the 50 Day EMA is a strong sign, and the fact that the market is trying to close at the top of that range is very bullish as well. With that being said, it is still a countertrend move, but it certainly looks like there is some momentum.
Technical Analysis
The technical analysis for this NZD/USD pair is negative longer term, but in the short term it looks like we could get a little bit of a rally. It’s possible that we could be seen inflation cooling off a little bit in the United States, but longer term trajectory still suggest that it’s going to be hotter than anticipated by traders last year. Because of this, I think we could see a little bit of a bounce followed by a turnaround. Furthermore, you also have to keep in mind that technical analysis can only get you so far.
Tariffs could be a major factor going forward, and it’ll be interesting to see what the United States in subduing. The tariff war that would kick off would certainly be negative for the New Zealand dollar, as New Zealand is obviously a commodity-based economy, that has a major influence on where things would go. Ultimately, what is interesting is that there might be some news leaking into the market’s on Friday, as we have seen gold suddenly take a huge hit for no apparent reason. That being said, Donald Trump has proven himself to be erratic and unpredictable more than once, so to try to front running any type of perceived move would be very difficult and dangerous to say the least.
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