NZD/USD Forecast: Kiwi Dollar Plunges Towards Support – 20 February 2023
The New Zealand dollar is a smaller market, so this will have a bit of an influence as the volatility picks up.
The New Zealand dollar has fallen significantly during the course of the trading week, but by the time we got to Friday started to find a little bit of support near the crucial 0.62 level. The 0.62 level is an area that a lot of people will be paying close attention to, because it has been support more than once. If we can break down below the bottom of the candlestick for the Friday session, then it’s likely that we go much lower. The market had recently formed a bit of a double top near the 0.65 level, in the New Zealand dollar against the US dollar, just as we have seen in multiple other currency pairs. Because of this, I think we got a situation where you have to look at this through the prism of a market that is trying to do everything it can to find its direction.
If we break down below the bottom of the candlestick for the trading session on Friday, I think that the New Zealand dollar will probably go to the 0.60 level, maybe even as low as 0.58 level. I do think this eventually happens, just due to the fact that there has been a major amount of negativity out there and I do think that continues to be one of the biggest problems. With that being said, it’s probably only a matter of time before smaller currency such as the New Zealand dollar get hammered. Furthermore, the New Zealand dollar is highly levered to the commodity markets, so that also comes into play.
If we rally, I think that the 0.65 level is still going to be very difficult to break above, and therefore I think it is probably a situation where you would see that as a brick wall.If we were to break above there, it would obviously be a very bullish sign, but right now I just don’t see the argument for making that happen.The market will probably enter a consolidation area at best, but the way we have seen the US dollar come roaring back, it does lead me to believe that we have further to go.The New Zealand dollar is a smaller market, so that also will have a bit of an influence as the volatility picks up.
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