The New Zealand Dollar continues to be choppy against the Loonie on Monday.
NZD/CAD
The New Zealand Dollar initially did try to rally a bit during the early part of the trading session on Monday but has pulled back a little bit. This is interesting because the 0.83 level is an area that's been important multiple times as resistance going back the last 2 years. Signs of exhaustion will more likely than not attract a lot of attention. But we also had a surge higher 2 sessions ago, so we'll have to wait and see what happens next.
Top Regulated Brokers
The 50-day EMA is an indicator down at the 0.8140 level and is an area that I think could offer support. If we pull back towards that area and bounce, then there might be value hunters, but this is a very noisy and choppy situation. Ultimately, this is a market that if we can break above the 0.83 level, it could change things rather quickly. Ultimately, if we were to break above there, then we could really start to see upward pressure.
Central Bank Policy Divergence and Asian Growth Risks
All things being equal, this is a market that I think you will have to be cautious with. Position sizing might be crucial, and you really, at this point in time, need to be very cautious with your sizing, as it looks like it's just back-and-forth behavior. The New Zealand Central Bank is, at least in theory, going to be raising rates down the road. The Canadians, on the other hand, it might be a situation where we are waiting to see further Canadian information.
New Zealand, unfortunately, is attached to Asia, and Asia right now has a big problem in the form of the Strait of Hormuz and the catalyst for growth possibly being closed down. So, with this, I think you probably see this resistance may hold, but this offers a short-term selling opportunity, not something easy. With that being the case, I think you're going to have opportunities in both directions if you're patient enough.
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