The New Zealand dollar started falling right away on Thursday, but has since bounced nicely off the crucial 50 Day EMA.
NZD/USD
The New Zealand dollar initially fell during trading on Thursday, but found enough support near the 50-day EMA to turn things around. The 50-day EMA has offered a bit of support, and we have then rallied pretty significantly from there to break above the 200-day EMA, which, of course, is an indicator that a lot of people watch very closely. Now that we're above there, it suggests that we're in an uptrend, and we've been in an uptrend for a couple of months. But we are still very much in the midst of a lot of sideways action. Overall, as the markets are essentially sitting around and waiting on a resolution to the conflict in the Persian Gulf.
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Key Resistance Levels and Central Bank Divergence
The 0.59 level above is significant resistance and an area that I think a lot of people will be watching very closely. If we were to break above there, then the market could go looking to the 0.60 level. Underneath current trading, we have the 0.58 level offering a bit of a floor as well.
Overall, this is a market that will be watching both of the central banks, as the New Zealand Central Bank is expected to raise rates and the Federal Reserve is kind of in a state of flux. Ultimately, this is a market that remains very noisy, very choppy, very heavily driven by risk appetite, and as risk appetite turned around during the New York session today, it does make a certain amount of sense that the New Zealand dollar was one of the beneficiaries. Whether or not we can actually break out, well, I don't know. I don't think that actually is how this plays out.
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