- I recognize that we are pressuring a major support level in the form of 0.6050, and that of course could be a major, situation just waiting to happen.
- If we continue to show signs of negativity, we could find ourselves down at the 0.60 level, which is an area that I think a lot of people would be concerned about due to the fact that it's a market that is, of course, highly sensitive to risk appetite and of course, interest rates.
- This pair will continue to be interesting to say the least.
After all, everybody's paying attention to the Federal Reserve and whether or not it will cut. I think at this point in time, you have to be very cautious, though, because quite frankly, this is a market that does tend to move quite radically. It'll be interesting to see how this plays out, because the NZD/USD exchange rate is a commodity currency. And of course, the commodity currencies are all over the place. The Kiwi will be no different as well.
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Risk On? Risk Off?
In general, I think this is a situation where we need to look at this through the prism of whether or not market participants feel more risk on or risk off, the market will more likely than not be a situation in where traders are trying to sort out whether or not people were willing to jump into anything other than the greenback. With retail sales coming out hotter than anticipated on the Tuesday session. I think at this point, people are betting that the Fed may have to stay tighter for longer.
If that ends up being the case, a lot of people will continue to run towards the US dollar, but at this point in time, things are so convoluted that it is probably an easier bet to simply wait for confirmation of any move. The New Zealand dollar is the smallest of the major currencies, and it shows in situations like we have at the moment.
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