The New Zealand dollar crashed into the 0.57 level for the 3rd time this week on Thursday as traders freaked out after the address to the nation that Donald Trump gave. It was odd because he said absolutely nothing new and rates spiked as people started pricing in the end of the world, I believe.
We have since bounced as the adults in New York came back into the room, not reacting with impulsiveness but looking at the longer-term picture. There was nothing new in that statement, so really nothing changed. It does make a certain amount of sense that price is going back to where it started. Whether or not it can actually get there by the end of the day, we don’t know, but the handful of things that we do know is that the 0.57 level continues to be very important.
Key Support and Resistance Levels
The 0.58 level is as well and it’s an area that I’ll be watching because if we can get above there, I think you have a real shot at this market going higher. That being said, I believe that this is a market that’s probably stuck in a little short-term range. Pay attention to the 10-year yields in the United States; the 4.30% level is important.
If we are below there, lower rates in America, that should help the New Zealand dollar and of course vice versa. It’s a risk appetite situation. We are a little oversold so it’s not a huge surprise to see some type of fight here, but if we can bounce from here, it’ll be interesting to see how things play out at 0.58. That would be in a general anti-US dollar type of regime. Friday is Good Friday, so keep in mind markets will be either thin or closed depending on what you’re dealing with.
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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.
