- The New Zealand dollar has had a very nice bounce during the early hours on Monday as it looks like we are trying to hold the 0.5850 level.
- This is an area that's been very important for quite some time so it'll be interesting to see if it can be held at this point in time.
I think in the short term, you are more likely than not to see some type of relief rally. The question of course is whether or not it'll be anything important. Is it trend changing? Probably not, but I think short term traders are going to be attracted to this market.
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If we do break down below the 0.5850 level, we will challenge the 0.58 level, which is a large round psychologically significant figure, and an area that's been important in the past as well. Anything below there, things start to get pretty ugly. The US dollar is like a wrecking ball against risk appetites. It'll be interesting to see how this plays out. Right now, it looks like the global markets prefer anything American and are pretty much afraid of anything that isn't.
Because of the Size of the New Zealand Dollar
The New Zealand dollar being a small currency only has so much pull in the world, and it is highly susceptible to what's going on in Asia. After all, most of its exports end up in Asia. So therefore, the Asian economy, the Asian recovery, all of that comes into play when you're trading the NZD/USD dollar. However, markets don't go in one direction forever. So, a bit of a bounce from here does make a certain amount of sense. The question is, can we get above the 0.6050 level, which is your next major barrier? We'll see, but if it's not able to get above there, then I think we're just going to see a fade the rally opportunity in a few sessions.
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