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NZD/USD Price forecast for the week of January 15, 2018, Technical Analysis

Christopher Lewis
Updated
The New Zealand dollar has been bullish during the week, breaking above the 0.72 level. We continue to see the US dollar struggle in general, so that helps the New Zealand dollar, obviously. There is a lot of noise just above though, so a pullback would make a bit of sense.

The New Zealand dollar has been bullish during the week, reaching above the 0.72 level handily. I think that breaking above the top of the candle for the week is a good sign, but I also recognize that the 0.7350 level is a bit more restrictive. Because of this, I believe that a short-term pullback could be coming, and that pullback should offer value that a lot of traders will be willing to take advantage of. That of course is how I plan to trade this market from the longer-term standpoint, buying the pullbacks. I recognize that the top of the consolidation is closer to the 0.75 handle, and I think we will go looking to reach that level. However, being a bit overextended makes people looking for value come into the market on the first amount of pullback.

If we can break above the 0.75 handle, the market should continue to go much higher, perhaps reaching towards the 0.7750 level next, and then the 0.80 level after that. The marketplace continues to be very noisy, but at the end of the day the New Zealand dollar is one of the least liquid major currencies that we trade, so it makes sense that we would see a lot of bouncing around. Looking at the stochastic oscillator on the weekly chart, we are a bit oversold in getting ready to cross on the moving averages, so I would not be surprised to see technical profit taking as well.

NZD/USD Video 15.01.18

This article was originally posted on FX Empire

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