The NZD/USD continues to test lower support and then produce slight upwards reversals as the lower trend remains intact.
The NZD/USD as of this morning is near the 0.56000 level as its downward trend continues to make support levels look vulnerable. While reversals upward certainly happen the long term movement of the NZD/USD remains bearish. The NZD/USD is now testing lows last seen during the coronavirus chaos of 2020, and there is reason to suspect the currency pair may even test lower depths given the result from the past two days.
Long Term Charts may Offer a Clue and Memory that the NZD/USD has been here before
U.S Federal Reserve hawkish interest rate policy remains very real and this is affecting the value of the NZD/USD. While New Zealand may be able to counter with a higher interest rate of its own, interest rate policy from the U.S central bank has essentially put the NZD/USD into long term historical lows not seen since 2020, and before that not since 2009. While speculators may be convinced the NZD/USD has been oversold, there is a start difference between short term and long term results.
Retail traders may find it extremely difficult to buy the NZD/USD and hold onto a position for several months if they are using leverage. While it might be possible to buy the NZD/USD on perceived support levels, key lower values continue to not only be penetrated, but often see sustained price action with downwards momentum.
The 0.56000 realm is now a key Psychological Level for the NZD/USD
If the NZD/USD slips below the 0.56000 and begins to show that it cannot muster a fight above this ratio, it may be a signal additional selling is going to occur. In early trading this morning the NZD/USD has flirted with lower values, but has continued to stay above this key level. However in the past two days, the NZD/USD has trader near the 0.55400 and 0.55600 marks.
- Speculators’ who believe the bearish trend will remain intact, may want to wait for upside price action which tests resistance levels in order to ignite their selling positions.
- Support levels near the 0.55900 to 0.55800 ratios do look tempting as short term wagers for traders who want to sell.
The NZD/USD continues to display a downward trend, but its price action has often been choppy. To take advantage of movement lower, traders should use entry price orders and relatively close take profit targets to cash out winnings, while using slightly wider stop loss ratios to insure choppy action doesn’t knock them out of a trade too quickly. Volatility will continue in the near term for the NZD/USD as global markets remain fragile.
NZD/USD Short Term Outlook:
Current Resistance: 0.56150
Current Support: 0.55900
High Target: 0.56355
Low Target: 0.55650
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