The NZD/USD downwards trajectory continues to test the willpower of technical traders as financial institutions have produced new long-term lows amidst obvious nervous sentiment.
Nervous sentiment has been seen in global Forex again this morning, and the NZD/USD continues to produce a bearish trend that is testing lows. The NZD/USD is near the 0.57675 ratio as of this writing and exhibiting prices that have technically not been seen since October 2022, this after breaking through lows produced in October 2023.
Bullish speculators who are keen on the NZD/USD and have buying bias need to remain patient because the currency pair appears to remain firmly within the grip of nervous selling by large players. The NZD/USD was able to display a slight run higher in the last week of November when the 0.59300 vicinity was tested. But early trading this Monday saw a low of nearly 0.58000 and then a reversal higher to the 0.58900 later in the day. However, since this high was touched selling has resumed and yesterday the 0.58000 level began to be tested again.
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Sustained Lower Trading and Nervous Outlooks
Sustained selling this morning has created fresh depths and the inability of the NZD/USD to recapture the 0.58000 level is not a welcome sign for short-term bullish perspectives. New Zealand economic data remains lackluster. Quarterly Manufacturing Sales numbers came in with a negative -0.1% result this morning in New Zealand. This news likely caused additional nervous outlooks for the NZD/USD which faces the potential of the U.S Federal Reserve becoming more neutral regarding its Federal Funds Rate in the coming months – even though a rate cut is expected next week of 0.25.
The U.S will release its CPI numbers today and the inflation outcome will impact Forex, including the NZD/USD. If the number is weaker than anticipated this would likely help the NZD/USD climb a little, but if the number is stronger it could put additional pressure on the currency pair. The question for bearish speculators is where support will prove durable, but it must be noted up to now the NZD/USD has shown support levels have been vulnerable mid-term.
Swift Velocity and More New Zealand Data
While the U.S data today will be significant, if the inflation results are neutral it will set the stage for choppy tests of outlook. Financial institutions do not appear confident regarding their mid-term viewpoints and while some traders may be tempted to believe support at some juncture will prove effective, betting against the trend thus far has been problematic.
- Yes, there have been occasional reversals higher, but the 0.63800 price level seen in the NZD/USD in late September 2024 almost looks like a distant memory.
- On Friday New Zealand will publish its Business Manufacturing Index and Visitor Arrival statistics, both will be important in the near-term.
- The swift velocity downwards of the NZD/USD may show selling has been too strong, but the lower depths should be treated with caution.
NZD/USD Short Term Outlook:
Current Resistance: 0.57880
Current Support: 0.57630
High Target: 0.58270
Low Target: 0.57550
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