- The New Zealand dollar has found itself struggling a bit during the session on Thursday, as we initially shot higher, but found the 50 Day EMA to be far too much to overcome.
- If we can break above the 50 Day EMA, then the market is likely to see a lot of buying pressure, but the fact that we struggle there during the day does suggest that we are going to continue to see a lot of hesitation.
- This does make a certain amount of sense, because there was a major “risk off move” during the US session in the stock markets, so I think that has a lot to do with why the US dollar picked up momentum.
Technical Analysis
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The technical analysis for this market is of course somewhat mixed, as we are trading between the crucial 50 Day EMA and the justice crucial 200 Day EMA indicator. Ultimately, if this market continues to stay in this range, there probably will be a lot of short-term choppiness, which does make a certain amount of sense considering the markets have been erratic to say the least.
You can make an argument that we just broke down below a trendline, about a week ago, only to turn around and retest it for potential resistance. If we can break above the 50 Day EMA, that would be very positive sign, but if we break down below the 200 Day EMA, I anticipate that the New Zealand dollar would be struggling against the US dollar, and quite frankly I’ve seen a major divergence between Asian currencies and European ones, at least as far as the trade against the US dollar. Ultimately, it looks like a lot of traders out there are a bit concerned about Asia, which extends into Australia and New Zealand, as they are so intertwined. Moderately currencies on the whole are suffering a bit, so that of course works against the Kiwi dollar as well.
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