Since the 16th of August, the NZD/USD has likely caused many speculators to walk away rather frustrated after glancing at their trading results. Choppy and swift changes to value have been demonstrated in the NZD/USD and the past two days have delivered another dose of movement. On the 16th of August, the Forex pair essentially dipped from 0.70350 to 0.69600. On the 20th of August, the NZD/USD found itself near lows of 0.68050 which tested values not seen since November 2020.
The current price of the NZD/USD is near 0.69900 as the Forex pair fights for traction and speculators try to contemplate which direction will be challenged next. Last Friday, the NZD/USD was near important support of 0.69350 when it suddenly shot higher and tested the 0.70200 mark. Volatility is likely to remain a staple of the NZD/USD as it grapples with nervous sentiment surrounding coronavirus implications in New Zealand and the government’s approach.
Technically, the NZD/USD showed the ability on Friday to break free of its lower price range via a one-month chart. In fact, since the 20th of August, the NZD/USD has gained after the Forex pair tested long-term lows. Traders may not believe the sudden bullish trend will remain technically and perhaps that is why a rather steady amount of selling has seemed to enter the market today, which has caused the Forex pair to come within sight of important short-term support.
If the 0.69900 to 0.69840 levels continue to be challenged, traders cannot be faulted for believing that the buying spree which took place before going into the weekend was overdone and a retest of lower values is going to ensue. The NZD/USD can produce fast changes of value per its fractional trading and speculators need to be careful with the amount of leverage they use. If support near the 0.69800 begins to be targeted, it is likely that additional selling could gain velocity downward.
The choppy results in the NZD/USD should serve as an important warning to all traders that its volatility can cause rather painful damage which can prove costly. The use of take profits and stop loss ratios is highly encouraged to guard against strong moves. If a trader has the stamina and they want to buy the NZD/USD near term, because the USD has been ‘weaker’ in the broad Forex market, this could have logical reasoning, but traders are urged to be cautious. Buying on small reversals lower which hover near important support may prove to be a risky, but worthwhile wager potentially.
NZD/USD Short-Term Outlook
Current Resistance: 0.70050
Current Support: 0.69800
High Target: 0.70500
Low Target: 0.69710
