NZD/USD Forecast Today 10/02: Limited Movement (Chart)

(MENAFN- Daily Forex)

• The New Zealand dollar initially tried to rally during the trading session on Friday, but after the Non-Farm Payroll announcement, we have seen the US dollar recover quite a bit against many currencies, including the Kiwi dollar itself.
• With that being said, the market is likely to continue to see a lot of choppy behavior, but this is a market that has been in a range to begin with.
• In other words, I think after the Friday data, it's very possible that nothing has changed.

Technical Analysis

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The technical analysis for this pair is somewhat muted, but I would say it probably favors the downside more than the up. After all, the 50 Day EMA sits just above current trading, and it has offered resistance multiple times over the last couple of weeks. It appears that there is a lot of trouble near the 0.57 level for the New Zealand dollar, and of course we had been in a long downtrend before getting there.

On the other side of the equation, we do have a lot of support near the 0.5550 level. If we do break down below there, then we will test the 0.55 level, and anything below there could be like a“trapdoor opening” in this pair. I suspect more likely than not we will simply cease sideways action as traders trying to come to terms with the idea of whether or not the US dollar is going to soften going forward, or if the New Zealand dollar will continue to pay the price. I suspect it's probably the latter of the two, as the Federal Reserve remains very tight, while the RBNZ will have to deal with the fact that the Chinese economy seems to be struggling a bit, and of course most traders are not very excited about putting a ton of risk on right now. In other words, your commodity markets that come out of New Zealand may struggle a bit.

EURUSD Chart by TradingView

I am not suggesting anything apocalyptic, just that the market is probably going to continue to see more of a“fade the rally” type of scenario in this market, at least for the time being. If we were to break above the 0.58 level, then I would start to have thoughts of a trend change, but it doesn't look like we are anywhere near that right now.

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