The New Zealand dollar initially rallied during the day on Wednesday,
but found the 0.7750 level above to be a bit too resistive yet again,
and pulled back to fall significantly. By the time the day was over, we
had formed a shooting star which of course is a very bearish sign. I
think that this market is going to continue to consolidate in this area
and then break down, which goes with my longer-term thesis of the US
dollar range supreme, while commodities and commodity currencies
struggle. I believe that it is only a matter of time before we break
down significantly, and perhaps head as low as the 0.7450 region. That
area was supportive last time we approached it, and I don’t see anything
to suggest that it won’t be this time.
Watch the commodity markets
I believe that we will have to continue to watch the commodity
markets in general, as they seem to be very susceptible to noise and
concern at the moment. With this, it is probably a much more secure bet
to assume the commodities are going to struggle every time they rally.
After all, there’s really nothing to suggest that economic conditions
are getting better around the world at the moment. I don’t necessarily
want to be a harbinger of doom, but I just think it were a bit stagnant
and will continue to be for the foreseeable future. With that I will
always be a bit suspect of commodity rallies.
I believe that the Australian dollar looking very soft at the same
time isn’t some type of Gwent sedans, and that the US dollar should
continue to climb. That of course will push this pair lower, and I do
believe that ultimately the 0.7450 level below gets broken as well. It’s
probably only a matter of time before we break down below there and
head to the 0.72 handle in my estimation. I don’t really have a scenario
in which I am willing to buy this pair.
Christopher Lewis, 23 April, 2015
Source:http://www.dailyforex.com/forex-technical-analysis/2015/04/nzd-usd-show-signs-of-resistance-yet-again-on-wednesday/43756
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