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NZD/USD Price forecast for the week of January 22, 2018, Technical Analysis

Christopher Lewis
Updated
The New Zealand dollar has rallied again this past week, for the sixth candle in a row. By doing so, we have gotten a bit overextended, at least in the short term. We approach the area above with caution.

The New Zealand dollar rallied again during the week, breaking above the 0.73 level, but as you can see on the weekly chart, there has been a difficult move to break above the 0.74 level, and I think at the resistance will start to come into play. The weekly candle is green, but it has given back about half of the gains, which of course isn’t necessarily the strongest sign. Because of this, I think we are going to see the markets rollover rather soon, but I’m not looking for some type of collapse, just simply a pullback. When you look at the stochastic oscillator on the weekly timeframe, the moving averages are not only in the overbought condition, but they are starting to cross. Because of this, I think we are going to see the market drop.

That’s not to say that we are going to collapse or that longer-term traders will be comfortable shorting, but I do think that we would see a handle or two the downside present itself. I believe that we are going to stay within the consolidation area, but at this point if you are not already long of the New Zealand dollar, it would be very reckless to start buying it. If you are not long already, you need to see a pullback with signs of significant support, or a break above the 0.75 level to trade to the upside to do so responsibly. In the short term, I suspect the sellers will make their money.

NZD/USD Video 22.01.18

This article was originally posted on FX Empire

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