- The New Zealand dollar has gotten pummeled during the trading session almost losing a full percent against the US dollar on Thursday.
- At this point I think a lot of what we’re seeing here is a potential reaction to the middle east.
- Finally furthermore we have the federal reserve suggest on Wednesday that they may not be cutting as quickly as people are counting on and that obviously will strengthen the US dollar as well.
It’s been a little bit jarring and disturbing that the US dollar continued to get sold off as the world essentially burns. It’s almost like the world has been asleep to what has actually been going on. Sometimes the markets take a little while to react to things. just comes down to whatever traders are focusing on.
Friday Could Be Very Important
So, I think the Friday session is going to be crucial for this pair because when you look at the weekly chart, and if we finish anywhere in this area, this is the third shooting star in a row on the weekly chart at the crucial 0.6 level, which will get my attention for a potential drop. The 50 day EMA is sitting just below the current price, and that could cause a little bit of a bounce.
But if the New Zealand dollar doesn’t recover the 0.60 level during the session on Friday, it may start to look really heavy. Keep in mind that the New Zealand dollar of course is highly leveraged to China and Asian growth but also risk appetite. And I think it’s the risk appetite component here that people will be paying attention to in the near term as the world has a lot of chaos to deal with presently, and we will have to navigate it as such.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.