On early Tuesday of this week, the NZD/USD touched the 0.58885 ratio, essentially retesting lows seen last Friday. The bearish momentum of the NZD/USD has been a talking point for Forex traders who tend to view the currency pair as a healthy barometer of the global Forex market. The lows reached a couple of days ago continued to flirt with depths not seen since the middle of November 2022.
However, speculators who have remained faithful to the notion the NZD/USD had been oversold, and that a turnaround had to develop may have had their faith partially restored as Tuesday moved along and yesterday’s trading flourished. A high around the 0.60055 ratio was produced yesterday. Yes, a reversal lower has taken place since then, but some NZD/USD speculators may feel the end of the bearish cycle for the currency pair is coming to an end.
NZD/USD Behavioral Sentiment and Speculative Notions
Nervous trading sentiment globally has sparked a stronger USD in the past month and a half. The NZD/USD was trading above the 0.64000 level on the 13th of July, which was followed by strong selling and the lows reached this Tuesday. Behavioral sentiment remains troublesome, the U.S. Fed stated only last week it intends to sustain higher interest rates until it is sure it has essentially killed off inflation. Yet a funny thing has taken place the past couple of weeks, U.S. data is getting weaker.
Yesterday’s weaker-than-anticipated U.S. Gross Domestic Product data helped weaken the USD. Consumer numbers on Tuesday from the States also showed that the American public may be growing nervous regarding their spending habits. Tomorrow the U.S. will publish Non-Farm Employment Change numbers.
U.S. Average Hourly Earnings a Potential Key Tomorrow for NZD/USD Trading
- On top of the employment numbers tomorrow from the U.S., Average Hourly Earnings will also be issued which give solid insights regarding U.S. inflation factors.
- Because a lot of the NZD/USD traders may find the hour late tomorrow for the currency pair when the Non-Farm Employment Change data is released, traders can expect some volatility in the currency pair on Monday too.
- Except, traders should keep in mind the U.S. is on a banking holiday this coming Monday, which means trading that is produced tomorrow and Monday could prove rather volatile with light volumes affecting the NZD/USD.
Traders who remain bullish regarding the NZD/USD may be proven correct. However nervous sentiment is still being generated and it may take a couple of weeks before it is washed away and risk appetite returns in force. Traders should stay realistic if they are targeting upwards value. At this point aiming for the 0.60000 above could prove a step too far if a speculator is using too much leverage.
NZD/USD Short Term Outlook:
Current Resistance: 0.59625
Current Support: 0.59400
High Target: 0.59960
Low Target: 0.59225
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