The New Zealand dollar went back and forth during trading on Thursday, as we continue to dance around the 0.72 handle, an area that has been support a couple of times recently. The market will continue to respect this area, at least until we can get some type of movement that allows for the New Zealand dollar to break free of either the 0.7220 resistance barrier or break below the 0.7185 support level. These are short-term levels, but that is what’s needed to release the kinetic energy to send this market and a much clearer direction. In the meantime, I suspect that scalpers are going to go back and forth in this pair, taking advantage of these quiet conditions.
If commodity markets rally, that should help the New Zealand dollar go higher, perhaps reaching towards the 0.7250 level. Otherwise, if the commodity markets fall significantly, that could send the New Zealand dollar down to the 0.7150 level underneath. That’s an area that has been supportive recently, so I would expect some type of kickback from that area. Longer-term, I anticipate that we should see buyers step in based upon value if nothing else, but right now I think we will continue to see a lot of noise, so keep that in mind, and keep your position size small. Short-term scalpers will continue to love this market if we can stay between the 2 levels that I mentioned previously. I think that the markets will continue to be very difficult, but eventually will show where it wants to go.