The NZD/USD has remained within the lower depths of its price range, and speculators who continue to feel attracted to the potential of buying positions should be careful. Yes, the NZD/USD did trade near lows on Friday and early yesterday and has reversed upwards, but it early morning highs achieved today continue to highlight that headwinds prevail as financial houses seem to be waiting on clarity which is in short supply from the U.S Federal Reserve.
Starting today the U.S. will release a slew of rather important economic reports. While technical traders may grimace while having to consider behavioral sentiment which is driven by fundamental insights, they may want to know that the CB Consumer Confidence reading will be delivered today in the U.S., followed by the Advance Gross Domestic Product numbers on Thursday. Consumer sentiment and growth numbers are certainly a part of the U.S. Fed’s outlook regarding its inflation expectations. And to top things off from the States this week, true inflation statistics will come on Friday.
The Scheduled U.S Data this Week and Federal Reserve Rhetoric Next Week is Crucial
While the lower depths of the NZD/USD continue to get tested with sudden reversals bursting upwards while apparently running out of steam all too quickly for bullish speculators, consideration of what is to come from the U.S. in the coming days needs to be taken seriously. It is clear that financial houses have taken a cautious stance and support prices around 0.61400 to 0.61200 depths are important.
- The NZD/USD could trade lower if U.S. data is stronger than anticipated over the next few days.
- While many analysts have been wagering on a more dovish Federal Reserve to develop, the near-term appears ready to remain rather aggressive. A rate increase of 0.25% has been digested into Forex and the NZD/USD for next week.
- The question is what the U.S. Federal Reserve rhetoric will sound like regarding its forecast for June.
Support and Resistance Levels Could be Choppy in Near-Term for the NZD/USD
Traders should be ready for more choppy conditions today and the remainder of this week from the NZD/USD. While looking for upside momentum from the currency pair may be tempting, any movements upward could prove to be short-lived until all the U.S. economic data is digested this week. Traders have been surprised frequently since early this February and experienced bullish momentum which has run out of power. Yes, one day the move upward will take hold and probably be sustained, but it is unlikely to develop in the coming days. Quick-hitting trades in the NZD/USD is likely the best wagering tactic in the near term.
NZD/USD Short-Term Outlook:
Current Resistance: 0.61740
Current Support: 0.61450
High Target: 0.62370
Low Target: 0.61875
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