By: DailyForex.com

The NZD/USD pair went back and forth during the course of the day on Thursday, as we continue to show significant support just below the trading area that we are and at the moment. The 0.84 level for me is the bottom of the larger consolidation area, with the breaking below of that level as a very negative sign for the New Zealand dollar itself. With that being the case, the market should continue to find support in this general vicinity, so therefore I feel that the short-term pullbacks should continue to offer buying opportunities going forward.

I believe that the market will eventually go to the 0.88 level, but that doesn’t necessarily mean that it’s going to be easy to do so. This is a market that of course has sold off rather drastically, so having said that it’s difficult to imagine that the market is simply going to spring higher from here just as ferociously as it fell. We will be climbing a “wall of worry”, and as a result it’s very likely that the market will offer us plenty of buying opportunities on dips and therefore it could be a market that you go back to time and time again.

The New Zealand dollar is highly correlated to risk.

The New Zealand dollar of course is highly correlated to risk, as it is tied to the commodity markets, plus New Zealand is a bit of a “riskier” economy. With that being the case, it should also be noted that New Zealand is often the agricultural supplier to Asia, so of course is highly tied to Asian economies as well.

If we did break down below the 0.84 level for a daily close, I think that the market would then head to the 0.8250 level first, and then the 0.80 level which of course is a large, round, psychologically significant number where I would expect quite a bit of support. Just as I would buy dips on a move higher, on a break down below the aforementioned 0.84 level, I would be sellers of short-term rallies.

NZDUSD 81514

Related Articles
  1. Credit & Loans

    How Long Bankruptcy Will Affect You

    How long will the sad chapter of bankruptcy impact the rest of your life?
  2. Insurance

    Umbrella Insurance: You May Need It, Too

    If you have assets to protect – or just run a business from home – you could be unpleasantly surprised at how much you need umbrella insurance.
  3. Personal Finance

    The World's Most Luxurious Vacation Retreats

    White sand beaches, nature preserves, amazing hot springs...if you're looking for heaven on earth, these spots qualify.
  4. Budgeting

    10 Ways to Save Money at the Farmers' Market

    Strategic shopping can help your budget as well as your health.
  5. Personal Finance

    Protect Your Home From Medicaid Liens

    Plan ahead for long-term care needs to protect your home and your estate.
  6. Home & Auto

    Avoiding the 5 Most Common Rent-to-Own Mistakes

    Pitfalls that a prospective tenant-buyer could encounter on the road to purchase – and how not to stumble into them.
  7. Professionals

    Chinese Slowdown Affects Iron Ore Market

    The Chinese economy's ongoing slowdown is having a major impact on iron ore demand.
  8. Trading Strategies

    Who Actually Trades or Invests In Penny Stocks?

    Although penny stocks are highly speculative, millions of people trade them daily. Here are 10 different types who do.
  9. Personal Finance

    Financial Analyst Cover Letters That Get You Hired

    Crafting a strong cover letter for a job can increase your chances of standing out from the crowd and landing an interview. Some techniques that help.
  10. Chart Advisor

    4 Stocks Still Flashing Buy Signals

    In the midst of volatility and a big market sell-off last week, these stocks are flashing buy signals.
RELATED TERMS
  1. Record Date

    The cut-off date established by a company in order to determine ...
  2. Supply

    A fundamental economic concept that describes the total amount ...
  3. Purchasing Power

    The value of a currency expressed in terms of the amount of goods ...
  4. Investment Banker

    Someone working at an institution raising capital for companies, ...
  5. Yield To Maturity (YTM)

    The total return anticipated on a bond if the bond is held until ...
  6. Gross Profit

    A company's total revenue (equivalent to total sales) minus the ...
RELATED FAQS
  1. Are stocks real assets?

    Stocks are financial assets, not real assets. Financial assets are paper assets that can be easily converted to cash. Real ... Read Full Answer >>
  2. Why would someone change their Social Security number?

    In general, the Social Security Administration, or SSA, does not encourage citizens to change their Social Security numbers, ... Read Full Answer >>
  3. Are spousal Social Security benefits taxable?

    Your spousal Social Security benefits may be taxable, depending on your total household income for the year. About one-third ... Read Full Answer >>
  4. What are the best ways to sell an annuity?

    The best ways to sell an annuity are to locate buyers from insurance agents or companies that specialize in connecting buyers ... Read Full Answer >>
  5. How are non-qualified variable annuities taxed?

    Non-qualified variable annuities are tax-deferred investment vehicles with a unique tax structure. After-tax money is deposited ... Read Full Answer >>
  6. Are spousal Social Security benefits retroactive?

    Spousal Social Security benefits are retroactive. These benefits are quite complicated, and anyone in this type of situation ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!