[ad_1]
It is interesting that we have seen such a huge difference between commodity currencies and many of the other ones against the greenback, but there is nothing on this chart that suggests weakness.
The New Zealand dollar broke higher on Tuesday to break above the top of a shooting star from the previous session. This is a very bullish sign, and we have seen this market break well above the 200-day EMA, and now it looks as if we are going to make a huge run towards the 0.70 level.
This makes sense considering that the Royal Bank of New Zealand has been very vocal about the fact that it likes that the market is pricing in the higher interest rates. Furthermore, they are very likely to do exactly that, so there should be no surprises. As long as commodities continue to pick up momentum to the upside, it is likely that the New Zealand dollar will be a bit of a beneficiary. The market continues to be very noisy overall, but it looks as if we are simply “stair stepping” our way higher.
The 200-day EMA underneath at the 0.6869 level and offers a little bit of support. If we were to break down below that level, it could start to swing the pendulum in the other direction, perhaps allowing the New Zealand dollar to drop to the 0.68 handle. While that is not necessarily what I expect to see, the reality is that you should always keep the other side of the trade in the back of your mind. This would more than likely have something to do with a major “risk-off” type of move around the markets overall. After all, the US dollar is considered to be a safety asset, so a lot of people will be paying close attention to whether or not people are looking to hide. After all, there are plenty of reasons to think that people may go hiding over the next couple of sessions.
If we can break above the 0.70 level, that could be a very strong sign for the New Zealand dollar, allowing it to go much higher. If we continue to see this massive commodity boom, that very well could happen, but I think it would more than likely only be after some type of consolidation and momentum building in order to make that move happen. It is interesting that we have seen such a huge difference between commodity currencies and many of the other ones against the greenback, but there is nothing on this chart that suggests weakness.
[ad_2]