The NZD/USD is near the 0.58040 level as of this writing. In early price action, the NZD/USD hit a depth of nearly 0.57705 this morning. The last time the currency pair had traded around this mark was in early November of last year. Technical traders will have to look at one-year and longer charts to gain a perspective on the potential depths the NZD/USD could challenge if global conditions within financial markets remain risk-averse.
While the 0.58000 is in plain sight and values for the moment are above this level, traders should acknowledge the fall below the 0.59000 level on the 18th of October has been sustained and the NZD/USD hasn’t shown much capability of climbing upwards with force. Psychologically if the NZD/USD were to see trading penetrate the 0.58000 mark and lower with significant strength and values remain below this ratio, it would be a signal more nervousness has developed within financial institutions.
NZD/USD and the Force of Global Conditions
Tomorrow the Reserve Bank of New Zealand will issue their Statement of Intent. However, the document while providing an outlook should not be given too much credence, particularly considering the unknown challenges that are ahead for the global economy, but also because New Zealand has a new government that is coming into power and this could affect changes to economic practices. The NZD/USD remains within the grasp of risk-averse global conditions which are creating USD-centric strength.
The U.S. will release Gross Domestic Product numbers today and this will cause a reaction in Forex. U.S. stock markets are trading at mid-term lows and U.S. Treasuries continue to produce high yields. While the Federal Reserve has essentially now said they will not raise rates on the 1st of November, risk-adverse conditions are creating fragile markets. While the NZD/USD trades near long-term lows, traders who are tempted to look for the upside should keep their ambitions geared towards quick-hitting highs, before potential reversals lower hit once again.
NZD/USD and the 0.58000 Ratio
- Day traders should remain cautious because global financial institutions are producing risk-adverse trading which is causing volatility. The NZD/USD is correlating to other major forex pairs as the USD remains a strong magnate in the short term.
- The 0.58000 should be watched as a barometer in the near term by speculators, a sustained move below could mean additional challenges lower will develop that potentially can move towards deeper values not seen in late October of 2023.
NZD/USD Short Term Outlook:
Current Resistance: 0.58115
Current Support: 0.57985
High Target: 0.58475
Low Target: 0.57610
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