- The New Zealand dollar edged higher on Friday but stalled near 0.57, with broader downtrend pressure still dominant.
- Sensitive to global risk appetite and U.S.–China dynamics, NZD continues to face strong headwinds, making rallies attractive selling opportunities.
The New Zealand dollar did rally a bit during the trading session here on Friday, but it looks like the 0.57 level is offering a little bit of resistance. If that scenario that we do in fact pull back from, it will just be a simple function of market memory. Signs of exhaustion, I think, give you an opportunity to start buying US dollars again.
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But even if we did break above the 0.57 level, then the 50-day EMA is the next resistance barrier that I'm looking at. Right now, that is at the 0.5761 level and dropping. Keep in mind that the New Zealand dollar is highly sensitive to the risk appetite of the global markets and the idea of what's going on between the United States and China, especially.
New Zealand Tied to China and Asia Overall
As New Zealand is a major contributor to the Chinese economy as far as raw commodities are concerned, although it's more agriculturally based than hard asset-based. Ultimately, this is a market that I'm looking for signs of exhaustion to take advantage of. I like the US dollar. The New Zealand dollar I think, is in serious trouble overall, and it has been in a very vicious downtrend for a while. And I just don't see why that would change.
That being said, if we were to break above the 200-day EMA, which is all the way at the 0.5857 level and dropping, then I might consider buying the Kiwi dollar. But really, at this point, it's pretty low on my list of strengths that I trade the market from. And the US dollar is by far one of the strongest. So, I continue to fade rallies.
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