The NZD/USD currency pair is trading near the 0.63100 ratio as of this writing. Spikes have been demonstrated in the NZD already the past day and a half of Forex trading, as the Christmas holiday grows closer and unbalanced positions start to affect the market. Yesterday’s low of nearly 0.62775 was essentially last touched on the 30th of November.
After Testing 6 Month Highs in the Middle of December the NZD/USD has declined
The past ten days of trading in the NZD/USD has seen the currency pair decline from a high around 0.65140 on the 13th of December. The high achieved only a couple of weeks ago challenged values not seen since June of this year. The selloff in the NZD/USD had not been too strong until early this week in many respects, this past Monday the currency pair traded near a high around 0.64090. Selling pressure on Tuesday saw the NZD/USD come within sight of the 0.63025 mark.
Yesterday’s price action in the NZD/USD saw a polite move higher as the 0.63500 vicinity was demonstrated. Then a quick and rather strong selloff occurred taking the Forex pair to its lows which brought important support levels into perspective. Trading in the NZD/USD has seen its bullish trend come into question the past couple of weeks certainly, and some speculators who have been pursuing upwards momentum may be finding their wagers proving costly if risk management has not been good.
Suspicious Selling However may Spark Contrarian Short-Term NZD/USD Bets
Traders need to acknowledge that Forex transaction volumes are significantly dropping globally because of the holiday season. While the move lower in the NZD/USD has certainly occurred and cannot be disputed there is reason to believe the selling pressure is perhaps overdone.
However looking for rational fundamental buying of the NZD/USD in the near-term may prove fatal because financial houses are taking their holidays. Volumes over the next ten days of trading will be light and see volatility which means the NZD/USD could continue to produce head scratching results.
- GDP statistics from New Zealand last week on the 14th of December came in stronger than expected, meaning the nation’s economy is remaining steady in the wake of global recessionary pressures.
- The NZD/USD with a three month perspective still remains within the upper tier of its price range and the recent selloffs may raise skepticism from some analysts.
Traders of the NZD/USD need to be extremely careful in the short-term if they insist on wagering as the Christmas holiday nears. Risk taking tactics need to be used and the potential of sudden spikes developing must be considered. The opportunity to buy the NZD/USD on selloffs approaching support may look favorable, but speculators may need to be quite patient when the market also slows because of the holiday season.
NZD/USD Short Term Outlook:
Current Resistance: 0.63320
Current Support: 0.63025
High Target: 0.63550
Low Target: 0.62780
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