The past week of trading has seen the NZD/USD mount an incremental move upward. This development comes on the heels of an advance that has essentially been generated since the 31st of May when the NZD/USD stumbled to a low of nearly 0.59860. As of this writing the USD/NZD is showing a value around the 0.61470 mark. Yesterday’s high around 0.61785 hit values not seen since the 24th of May.
The reason for the turnaround higher in the NZD/USD seems to be building on the notion the U.S. Federal Reserve is about to pause its interest rate hikes. Later on today, the Fed will make its FOMC Statement and it appears many financial institutions believe this may be the start of a more dovish Federal Funds Rate policy from the U.S central bank.
However, this behavior from financial houses doesn’t mean they are correct. Wrong wagers from large financial institutions have been made before. But, yes, there is no denying the move higher in the NZD/USD has not been taking place. If the Fed were to surprise the market with an increase today, the NZD/USD would likely suffer a strong selloff.
A resistance Level of 0.62000 in NZD/USD could be a Target
Day traders who decide to jump into the deep end via their NZD/USD wagers before the U.S Federal Reserve pronouncements today are gambling. Perceptions regarding the possible decisions of the U.S. central bank may prove correct, but volatility will be robust as the Fed statement draws closer and the NZD/USD will gush with price velocity in the aftermath.
- The 0.62000 markups above will likely become a wishful target of traders pursuing upwards price action today, but this could prove overly ambitious for speculators who have limited amounts of money in their accounts to wager on the direction.
- Take-profit orders should be used to cash out winning positions, so traders do not see their winning trades vanish into thin air before they can be recorded because of a sudden reversal.
- Choppy conditions will become prevalent in the NZD/USD and most other Forex pairs today. Traders need solid risk management.
A Potential Federal Reserve Halt Today and its Outlook will certainly be Impactful
If the U.S Federal Reserve does not increase its interest rates today this would be significant. However, because the decision has been anticipated by many in Forex, it is actually the FOMC Statement looking forward that could prove to be the catalyst that impacts the NZD/USD in a large way. What the Fed says about inflation later today could prove to be a huge factor regarding market direction and create fast conditions.
NZD/USD Short-Term Outlook:
Current Resistance: 0.61650
Current Support: 0.61310
High Target: 0.62225
Low Target: 0.60930
Ready to trade our daily Forex forecast? Here’s some of the best New Zealand forex brokers to check out.