The New Zealand dollar has pulled back initially during the trading session on Tuesday, as we head into the holidays. We have recently broken above a downtrend line, and after the impulsive candlestick on Monday, it looks like we are ready to go much higher. At this point, it’s likely that the market will try to go towards the 0.68 level, which is the 100% Fibonacci retracement level. Pullbacks at this point should continue to see plenty of buyers based upon value, and the fact that the US/China trade situation is getting better certainly doesn’t hurt, as the New Zealand economy is highly influenced by exports to Asia.
At this point, as long as the market can stay above the 0.65 handle it’s likely that it will remain elevated, and that pullbacks will continue to offer plenty of buying opportunities. We are in a very quiet time of year obviously, so it is a market that may take a bit of patience to deal with. It liquid markets can behave a bit strange, but over the longer term this certainly looks as if where the market is trying to go. The New Zealand dollar has been strong for several weeks, but at this point it looks as if it’s starting to go into “overdrive.” While the next couple of days will be quiet, once we get back to work early in January, it’s very likely that the New Zealand dollar may be one of the better performing currencies out there. Beyond that, the Australian dollar looks to be very similar, and the two currencies do move in the same direction over the longer term against the US dollar. This is a move into a “pro Chinese” type of currency play, which of course both the Kiwi dollar and the Aussie dollar are beneficiaries of.
At this point, as long as the market can stay above the 0.65 handle it’s likely that it will remain elevated, and that pullbacks will continue to offer plenty of buying opportunities. We are in a very quiet time of year obviously, so it is a market that may take a bit of patience to deal with. It liquid markets can behave a bit strange, but over the longer term this certainly looks as if where the market is trying to go. The New Zealand dollar has been strong for several weeks, but at this point it looks as if it’s starting to go into “overdrive.” While the next couple of days will be quiet, once we get back to work early in January, it’s very likely that the New Zealand dollar may be one of the better performing currencies out there. Beyond that, the Australian dollar looks to be very similar, and the two currencies do move in the same direction over the longer term against the US dollar. This is a move into a “pro Chinese” type of currency play, which of course both the Kiwi dollar and the Aussie dollar are beneficiaries of.