NZD/USD Forecast Today 05/11: Overhead Pressure (Video)
Date
11/5/2024 2:24:16 PM
(MENAFN- Daily Forex)
The New Zealand dollar initially did try to rally a bit during the trading session here on Monday, but it gave back gains and ended up forming a relatively negative turn of events. All things being equal, this is a market that I think will continue to pay close attention to a lot of different things, not the least of which would be the U.S. elections, but also would be the federal Reserve interest rate decision on Thursday. So, we've got a lot of things to get through this week. And because of this, I think it will be difficult to get a sustained move until probably late Thursday, early Friday.
On a Rally
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If we do rally from here, the 0.61 level would be an area of significant resistance. And not only have we seen noise there previously, but we also have the 50-day EMA and the 200-day EMA indicators hanging about that area. If we fall from here, then we could be looking at the 0.59 level being tested, which was a major support level and a scene where the double bottom from earlier this year occurred. Anything below there would be disastrous for the New Zealand dollar, as it is a“risk on currency.” The NZD/USD pair continues to be a measuring stick for risk appetite in general, as it is heavily influenced by commodities and of course, Asian economic cycles.
That being said, I think the next couple of days are probably really choppy and really noisy, but whether or not we gain traction, I think is a completely different question. And it's not something that I would expect to see. In general, this is a market that is going to be very sensitive to risk appetite, so we'll have to watch that very closely as well. The risk appetite can be quantified several ways, not the least of which would be simply looking at the stock markets around the world, as they rise and fall together most of the time.
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