With 2017 coming to a close the USD bears have been having a swipe when it comes to most of the major pairs and setting trends at present. While liquidity is low this time of year, the market tends to be more susceptible to a bit of volatility and this can be quite clearly seen in the NZDUSD. There has been little economic news for the NZD as of late, instead it has been mostly USD weakness which has been the driving force here for the pair - and with uncertainty likely to be a major factor in the first quarter of 2018 it seems unlikely the Reserve Bank of New Zealand will be jumping to push rates higher. If we did however see further economic expansion from the US then it's likely the US dollar will jump higher and this could put the pressure back onto the NZDUSD. However, in the interim it seems that the NZD bulls have taken some control and are pushing higher.
One major point of interest so far for the NZDUSD has been the 200 day Moving Average (MA) , which the NZDUSD does like to play off. The bulls have rushed up the charts, but came up short against this important MA, and the feeling it seems is that during this period it could easily get shot back down if there is a move higher. In the event that it does lift higher, and through the MA, resistance can be found at 0.7145. If we see a reversal of fortunes then support levels can be found at 0.7080, 07027 and 0.6961 on the chart. Nevertheless if the 200 day moving average is broken it would be a strong bullish signal, but there is also a bearish trend line to contend with in the long run if we do see a strong surge higher - as can be noted on the chart above.
I touched on the USDCAD as well yesterday and the possibility of some strong moves. Well with the weakness of the USD it seems that has happened and we saw some sharp drops from the bears. I still feel that the USD will be strong in the long run, as it traditionally has been, but for the foreseeable future it would seem that the USD bears are in control and the CAD is taking on some favour.
As the bears look to move lower it is likely that will target support levels around 1.2427 and 1.2108 - in the long run. I say long run as there are other levels in the way, but these are the major ones that traders will be focused on. Resistance levels can be found at 1.2628, 1.2759 and 1.2921 on the charts, and are unlikely to be targeted unless we see some bullish momentum come back into the market for the USD.
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