By: DailyForex.com

The NZD/USD pair rose during the course of the day on Monday, but keep in mind that liquidity would’ve been a little bit thin during about half of the day. After all, the Americans and the Canadians were celebrating Labor Day, so as a bit of a false impression. I still think that the 0.84 level above is resistive, and I am still paying attention to the shooting star that informed on last Thursday. With that, I think that the sellers will come back into this marketplace and push things down, meaning that it’s only a matter of time before we can start selling.

Ironically, it is an announcement out of Australia that I’ll be paying the most attention to. With the Australians releasing their rate decision today, the accompanying statement will be parsed and scrutinized by the marketplace. The New Zealand dollar is heavily influenced by the economic situation in Australia, and as a result if the central bank still looks very timid, I believe that the New Zealand dollar will be sold off. On top of that, the breaking down below 0.84 is actually significant.

100 pips.

I believe that the resistance area above the 0.84 level extends all the way to the 0.85 level. Because of that, I don’t imagine buying this pair until we get above that level. Because of this, I am very bearish of this market, and would even consider selling a bearish candle above current levels. However, I think that we will ultimately break down below the recent low as that we’ve seen, meaning that we should then head to the 0.80 level given enough time. Between here and there, I would anticipate a bit of support at the 0.8250 level, but I do not expected to be heard shattering by any stretch of the imagination.

Going forward, I anticipate that the New Zealand dollar can be sold every time it rallies, and I anticipate that I will be doing exactly that over the next several weeks. If we do break above the 0.85 handle however, I believe that this market could easily go to the 0.88 level which is the top of the previous consolidation zone.

NZDUSd 9214

Related Articles
  1. Economics

    How Interest Rate Cuts Affect Consumers

    Stock traders usually rejoice when the Federal Reserve cuts interest rates. But it’s not always best for everyone.
  2. Economics

    How Imports And Exports Affect You

    Imports are an important indicator of an economy’s health. In a healthy economy, exports and imports are both growing.
  3. Investing Basics

    How You Make Money In Real Estate

    No matter what anyone tells you, the basic ways that money is made through real estate haven’t changed in centuries.
  4. Investing Basics

    How An IPO Is Valued

    The process of determining a company’s initial share price includes quantitative and qualitative components.
  5. Investing Basics

    What are Government Securities?

    Government securities are debt instruments that governments issue to raise capital.
  6. Investing Basics

    Free Cash Flow Yield: A Fundamental Indicator

    Free cash flow can measure a business’s performance as if you’re looking at its net income line.
  7. Technical Indicators

    Four Commonly Used Indicators In Trend Trading

    No single indicator can punch a ticket to market riches, but here are four that remain popular among trend traders.
  8. Forex Education

    Effects Of Currency Fluctuations On The Economy

    Huge movements in a currency can dictate an economy’s fortunes. In a manner of speaking, the currency becomes the tail that wags the dog.
  9. Stock Analysis

    Analyzing Microsoft's Return on Equity (ROE) (MSFT)

    Discover a detailed analysis of Microsoft's historical return on equity, and learn how its ROE stacks up to its competitors in the tech industry.
  10. Investing Basics

    Defining The 3 Types Of Investments

    Investments can be divided into three distinct groups – ownership, lending and cash equivalents.
RELATED FAQS
  1. How liquid are BlackRock mutual funds? (BLK)

    BlackRock, Inc. (NYSE: BLK) mutual funds are very liquid, as are all mutual funds. An investor receives payment for a redemption ... Read Full Answer >>
  2. When does a growth stock turn into a value opportunity?

    A growth stock turns into a value opportunity when it trades at a reasonable multiple of the company's earnings per share ... Read Full Answer >>
  3. What is arbitrage?

    Arbitrage is basically buying in one market and simultaneously selling in another, profiting from a temporary difference. ... Read Full Answer >>
  4. What is Fibonacci retracement, and where do the ratios that are used come from?

    Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician ... Read Full Answer >>
  5. What is a derivative?

    A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, ... Read Full Answer >>
  6. What is finance?

    "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center