By FXEmpire.com
The NZD/USD pair did very little during the session on Monday as the markets showed weakness all about. The commodity markets had a mixed day, and perhaps this is part of what has given this pair a bit of support. However, on the weekly chart we are testing the bottom of a massive shooting star, and if we fall below the 0.7850 level the shooting star would be “triggered” as a sell signal.
The 0.78 level below that could be supportive as well, but the pair is most certainly in a downtrend overall. This market is highly sensitive to commodities, global growth, and general trust of economic conditions. This will make the Kiwi dollar a hard currency to own in the near term, and until the European situation gets figured out, this will more than likely be the case in this pair.
The US dollar is one of the strongest currencies over the last couple of months, so this pair could certainly be one to watch as the trend lower is very likely to continue as long as we have headline risks out there. In fact, we simply see bounces like we have seen over the last couple of weeks as opportunities to sell the Kiwi from higher levels.
As long as there is a run to the Dollar, the commodity currencies get hurt. The Kiwi is much less liquid than the Aussie markets, so this pair will move much more in times of concern. In fact, we like selling on the rallies as this pair should continue to be a hotbed of action if we get a real breakdown in the European situation. As we think this is the case, the pair is likely to continue lower now that we have seen the shooting star on the weekly chart.
The sub-0.78 level in this market should send this pair down to the 0.75 level. As we see this as a clear cut case, we are willing to not only sell this pair on weakness, but willing to hold down to that area.
Click here a current NZD/USD Chart.
Originally posted here
