The NZD/USD has moved to short-term lows as cautious trading has started to affect behavioral sentiment while financial houses brace for risk-coming events.
The NZD/USD is trading near the 0.64500 level as of this writing, having moved lower this morning after the currency pair touched a high of nearly 0.65075 yesterday. The downturn has come after the NZD/USD challenged its higher range in the past week of trading without being able to sustain its apex values. A high slightly above the 0.65300 ratios was seen on the 18th of January.
Storms and U.S Federal Reserve Outlook Potentially Affecting NZD/USD
Heavy rains have hit New Zealand recently, and while flooding in some areas is a troubling concern, this has not likely been the main impetus for a weaker New Zealand dollar. Having achieved a rather comfortable bullish trend since the middle of October, the NZD/USD is maintaining its solid mid-term trend upwards.
The move lower the past day is not an indicator that a massive bearish reversal is about to develop. It is more likely a cautious approach regarding the upcoming U.S. Fed rhetoric tomorrow and U.S. jobless numbers on Friday.
Support for the NZD/USD needs to be monitored around the 0.64350 to 0.64250 ratios, but even if those levels were to prove vulnerable bullish traders may be willing to seek buying positions while believing upwards momentum is going to be demonstrated sooner rather than later. The more likely notion that the NZD/USD is experiencing a short-term selloff as financial houses become conservative before tomorrow’s U.S Federal Reserve Monetary Policy pronouncements is probable. The U.S. Fed is expected to raise interest rates by 0.25% again, but it is the U.S. central bank’s outlook regarding future rate hikes that will stir Forex including the NZD/USD.
NZD/USD Speculators may be ready to Wager on Upwards Momentum Developing
If the 0.64500 mark which is being fought over now is able to sustain its value, this could spark additional bullish behavior in the short-term. Having flirted with the 0.65000 ratio the past week of trading without being able to sustain momentum above, speculators may still be looking at this level as the target. However, simply aiming for closer resistance levels in the short-term as take profits marks may be the more realistic goal and cautious approach for wagers.
- The bullish trend in the NZD/USD is likely, not dead, but the move lower the last day is a reminder financial houses remain concerned about the outlook for U.S Federal Reserve monetary policy.
- Traders should brace for volatility before and after the U.S. central bank’s announcements on late Wednesday, choppy conditions will prevail in the NZD/USD with fast price velocity.
NZD/USD Short-Term Outlook:
Current Resistance: 0.64675
Current Support: 0.64330
High Target: 0.64980
Low Target: 0.64020
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