The NZD/USD is around the 0.59550 ratio as of trading this morning. The currency pair had dropped to a low of nearly 0.58575 last Friday, this before financial institutions stepped in and started buying.
Proving once again that timeframes in Forex are always important, the NZD/USD is near the 0.59550 mark as of this writing. The currency pair has traded higher in the past handful of days. However, the move upwards that has developed since mid-Friday of last week after lows around the 0.58575 mark were challenged. Weaker than expected jobs numbers from the U.S last Friday helped spur the reversal higher.
The move upwards in the NZD/USD should be treated with respect. Behavioral sentiment in the broad Forex market is leaning into the notion of a weaker USD centric mode based on the notion the Federal Reserve will have to lower interest rates in September. The NZD/USD has returned to a price vicinity which is a known realms.
One Week and Monthly Trading in the NZD/USD
Economic data from New Zealand has been lackluster for a while. No parades are starting for recent successes. The NZD/USD continues to produce choppy price action in an environment that showcases its correlation to the whims of USD centric Forex trading. The current levels of the currency pair could even be considered to still be within the lower part of its one month chart, compared to its one week bullish run.
Day traders of the NZD/USD need to understand the currency pair’s ability to trend and move quickly. Risk management is essential in the NZD/USD because wide spreads and large moves are not uncommon. Traders who are tempted to look for some upside price action after the recent run higher cannot be blamed, but they shouldn’t get too overconfident quite yet. The 0.60000 realm may feel like a logical target, but for smaller speculators it may be a few steps too far for short-term wagers.
U.S Economic Data and Sentiment
Impetus for the NZD/USD over the next couple of days will mostly come from existing behavioral sentiment among financial institutions. While many big traders may believe the U.S must cut interest rates in September, there are no guarantees and this is likely why the NZD/USD has not catapulted above the 0.59700 level since late July. And some folks may believe an interest rate cut of 0.25 has already been priced into the USD.
- More risk appetite will have to be shown in global markets and a few layers of nervousness will still have to be peeled off before sustained higher ratios can be produced.
- If the NZD/USD is able to move above the 0.59600 level today and create the ability to show it can remain above this mark, then perhaps more buying will emerge.
- For now the NZD/USD may be comfortable within a choppy technical realm that flirts with new highs but doesn’t produce them easily.
NZD/USD Short Term Outlook:
Current Resistance: 0.59610
Current Support: 0.59545
High Target: 0.59720
Low Target: 0.59470
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