NZD/USD Forecast: Falls Below 200-Day EMA

• Despite the fact that Friday was a very positive turn of events for the New Zealand dollar, as the US dollar has suffered at the hands of very poor employment numbers.
• However, you can see that the Monday session initially looked positive, but we have since fallen.
• This is a continuation of the negativity that we have seen over the last several days, and the fact that we are hanging around the 200 Day EMA is very important to pay attention to, as it is the longer-term trend defining indicator for quite a few traders out there.

Technical Analysis

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The technical analysis for the New Zealand dollar is in a bit of a state of flux. The 0.59 level is an area that previously has been support, but it has also been resistant. We are sitting just below the crucial 200 Day EMA, which in and of itself attract quite a bit of attention. If we can break down below the bottom of the Friday candlestick, then it’s likely that the New Zealand dollar will go looking to the 0.57 level. On the other hand, if we were to turn around and break above the high of the last 3 candlesticks, then I think you’ve got a shot at the 50 Day EMA, which is sitting just below the crucial 0.60 level. Anything above there opens up the possibility of a move to the 0.61 level, but I think it might be a bit difficult at this point, due to the fact that commodity currencies in general look pretty anemic.

Ultimately, I believe that the US dollar is oversold, and we have a situation where the global economy might be getting ready to suffer. If that’s going to be the case, currency such as the New Zealand dollar will be thrown out of favor, as traders look to buy things like US Treasuries, which of course demand US dollars. I think that’s part of what’s going on here, and then of course we also have to worry about whether or not the Federal Reserve sees some kind of reason to cut rates or not. Ultimately, it looks as if the Federal Reserve is likely to be somewhat tight still.

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