The NZD/USD is trading near the 0.58985 mark as of this writing having fallen below the 0.59000 ratio earlier today and struggling to find enough momentum upwards to stay above the key psychological level. The NZD/USD has correlated to the broad Forex markets in a clear manner since the middle of July and has produced a bearish trend that all technical charts effectively show.
Bullish Traders who have Bias within the NZD/USD must be Careful
While many financial institutions and speculators of the NZD/USD may feel the currency pair has been vastly oversold and the New Zealand Dollar should be much stronger, the route downwards mirrors all major currency pairs that are trading against the USD. Global markets remain risk-averse as the U.S. presents a few reasons to remain nervous and this is helping the NZD/USD selloff.
Since the middle of August, the 0.59000 mark has been fought over with plenty of slight reversals higher when the level has been penetrated lower. This does give an opportunity for speculators to perhaps try and launch short-term buying positions of the NZD/USD while looking for quick-hitting upside movement. However, the price and trend of the NZD/USD has also been lower, and current behavioral sentiment makes looking for sustained moves rather difficult. Traders with the existing bullish bias of the NZD/USD should be cautious.
U.S Data, Treasuries and Politics and the NZD/USD
Nervousness regarding U.S. economic data continues to cast a shadow on Forex and the NZDZ/USD. Equities in the U.S are performing jittery and U.S Treasuries continue to attract plenty of money as locked-in ‘returns’ are sought by financial institutions. U.S politics are also causing concerns, U.S spending and deficits are not being properly addressed. Typically, politics would be a long-term concern and not cause a lot of reactions in the financial markets, but the fight for U.S. leadership in the House of Representatives needs to be resolved quickly.
- U.S. jobs numbers will be printed this Friday and the Non-Farm Employment Change results, and the Average Hourly Earnings data will be watched closely as the U.S. Federal Reserve lurks.
- If the NZD/USD can penetrate 0.59000 higher today, it may continue to act as a magnate for traders looking for reversals up and down to flourish over the next two days leading to Friday’s U.S jobs numbers.
- The move higher last week in the NZD/USD is evidence that financial institutions continue to believe the currency pair is oversold, but nervous conditions are causing headwinds across Forex as the USD remains strong.
NZD/USD Short Term Outlook:
Current Resistance: 0.59085
Current Support: 0.58945
High Target: 0.59495
Low Target: 0.58775
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