NZD/USD Price Forecast: Kiwi Rejected Again At 0.5650 Resistance

The New Zealand dollar continues to see a lot of resistance and has fallen again after trying to rally on Thursday.

NZD/USD

The Kiwi dollar initially tried to rally during the trading session on Thursday but gave back gains as soon as we got above the 0.5650 level. The 0.5650 level is an area that a lot of people will be watching very closely, as it has offered resistance not only over the last five or six sessions, but has also offered support and resistance in the past.

For my chart, I have the 0.56 level marked because it's kind of a midpoint between that and the support level at 0.5550. All things being equal, this is a market that I'm bearish of.

The U.S. dollar will continue to offer more yield.

Quite frankly, the RBNZ doesn't look likely to raise rates quickly, while the Federal Reserve is almost certainly going to be doing so in December. Even if the Kiwi central bank was to raise interest rates, the differential is just that wide.

Beyond that, you have to worry about things like energy inputs into New Zealand because it's unfortunately trapped in a cycle of needing oil transported across the sea, and beyond that, quite often through the Persian Gulf or the Strait of Hormuz. So, with all that being said, New Zealand unfortunately is at the mercy of the rest of the world.

I think this is a market that, every time it rallies, you start to look for signs of exhaustion to fade. It's worked out quite nicely over the last couple of weeks, and it's really not until we break above the 0.57 level on at least a daily candlestick that I start to look to the upside. To the downside, we could be talking 0.50 by the time it's all said and done.