- The New Zealand dollar has been crushed during the trading session on Tuesday as traders came back to work from the United States.
- The 0.60 level continues to be massive resistance.
- Despite the fact that we have lost roughly nine tenths of a percent, the reality is that this doesn't necessarily change anything.
It just suggests that we are still very much stuck in the same consolidation range we have been in for a while. This would be between the 0.60 level and the 0.5850 level. It is worth noting that the 50-day EMA has just crossed above the 200-day EMA in the last session or two. That is the so-called golden cross. So longer-term traders may be looking at that as a potential signal to buy and hold. That being said, they need to clear the 0.6050 level to be sure that we are out of this area.
Was Monday a Harbinger?
Top Forex Brokers
Remember on Monday we had formed a shooting star, and I said that could be trouble, but I also suggested that perhaps part of what was going on was a simple lack of volume coming into the picture. After all, Monday was Memorial Day, and now that the traders are back, it looks like they're decidedly pro-dollar, at least for the moment. I think we have a situation where we probably just go back and forth and cause a lot of chaos to trading accounts who are not trading the range.
If we break down below the 0.5850 level, then I think it's likely that the New Zealand dollar will drop to the 0.5750 level. On a break above the 0.6050 level, then we could go as high as 0.6350, although that’s a longer term move. As things stand right now, we're still in the process of working off some of the excess froth from that vicious bounce about a month and a half ago.
Ready to trade our daily Forex analysis? Here's a list of the brokers for forex trading in New Zealand to choose from.