NZD/USD Forecast Today 21/10: Testing Support (Video)
Date
10/21/2024 4:42:49 AM
(MENAFN- Daily Forex)
The New Zealand dollar has rallied a bit during the early hours on Friday as the market continues to see the 0.6050 level as a major support level. All things being equal, this is a market that I think continues to see a lot of noise around this area. I do think the fact that the market has ended up showing so much support over the last couple of weeks.
Because of this, I'm paying very close attention to this market because, as this market goes, probably goes to the US dollar. That being said, it's worth noting that the Reserve
bank of New Zealand recently cut interest rates by 50 basis points, just as the Federal Reserve did. So now the question is, where do we go from here? Ultimately, I do think this is a market that is right on the precipice of a bigger move.
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I think there are a couple of different scenarios getting ready to play out here. If we break to the upside, that more likely than not would see the US dollar really kind of taking on the chin against everything. It won't be just the New Zealand dollar. The 0.6120 level is the gateway to higher pricing from what I see. But on the other hand, if we turn around and fall from here and break down below the 0.60 level, I think that's a very strong US dollar across the board, not just New Zealand.
You do need to keep in mind that the Kiwi dollar is highly sensitive to commodity markets and Asia, and therefore we need to watch all of that, but furthermore you also have to pay attention to risk appetite. While we have had a little bit of a bounce on Friday, be remiss if I tried to suggest that was anything more than a short-term move. With that being said, keep an eye on this pair, it could be crucial.
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