- The New Zealand dollar has shot straight up in the air during the course of the Friday session breaking above the 0.62 level by doing so.
- This is a market that looks like it wants to go higher, but we are getting a little bit stretched.
- There is a lot of noise just above here in the past when we look back at the New Year’s Eve timeframe.
With that, I think we’ve got a situation where we may stall a bit. Keep in mind that the New Zealand dollar is a commodity-driven currency, and of course one that is highly sensitive to Asia. That being said we probably need to work off some of this excess fraud. You can make an argument that the market just formed a massive W pattern. If that’s the case, then we could be talking about a 400 point range based on the measured move, which would be the 0.6650 level. Again, we’re overdone, but it looks like the 50 day EMA is going to turn higher and break above the 200 day EMA, kicking off the so-called golden cross.
No Interest in Shorting
I don’t have any interest in selling this market after Jerome Powell came out and finally admitted during the Jackson Hole Symposium that the Fed is going to cut in a cycle not just test or cut now whether or not that actually ends up being the case. We’ll have to wait and see if they get a little too aggressive.
Ironically, it may make the US dollar more appealing because people will be worried about what comes next. Nonetheless this is a market that looks bullish, so I think short-term pullbacks and the subsequent bounce after them probably end up being buying opportunities. With this in mind, I will be somewhat careful and patient in finding my trades in this pair.
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