The New Zealand dollar has broken down a bit during the trading session on Tuesday as we continue to see a lot of questions asked about the interest rate situation in the United States.
After all, we've seen the 10-year yield just take off straight up in the air and at this point in time we are going to have to come to some type of resolution. As long as those yields in America continue to climb that is going to put a beating on certain currencies such as the New Zealand dollar as it is a riskier currency.
And of course, New Zealand has to deal with the possibility that they won't have energy in New Zealand; they are running out of it in much quicker fashion than other places like the United States.
A Floor in the Market
The 0.58 level underneath is a bit of a floor in the market and as long as we can stay above there then I think we've got a shot at this market turning around and going to the 0.5950 level. If we break down below the 0.58 level, then the market could go down looking to the 0.57 level.
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That probably accompanies higher interest rates in America so keep an eye on that 10-year yield which like I said has gone straight up in the air and it's been a major influence on what's happening around the world.
Keep in mind that the interest rates are rising because of that potential energy crisis as the Federal Reserve will have to stay tighter for longer. So, I fade rallies that show signs of exhaustion, I almost certainly would sell this pair if it were to break down below the 0.58 handle.
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