The NZD/USD is trading near the 0.61075 ratio as of this writing, the currency pair is traversing a price realm which is bouncing along support levels produced in the second week of December.
Technically the current support realms that are being tested are important. Speculators should note the current values the NZD/USD is literally next to, are levels seen before the U.S Federal Reserve released its December FOMC Statement. This is not a coincidence, psychological price levels in Forex almost always represent crucial behavioral sentiment that has been factored into trading software via human bias.
The ability of the NZD/USD to traverse lower since late December mirrors the broad Forex market as the USD has taken on a stronger stance. Traders who have remained stubborn while anticipating a steady reversal higher to take hold have likely had losses mount. On the 2nd of January the NZD/USD price was trading near the 0.62900 level. As Forex volumes have returned to normal since the New Year’s holiday incremental bearish momentum has continued in the NZD/USD, the question is when it will stop.
NZD/USD Risk Perspectives and Nervousness
Global risk appetite since the return of financial institutions after the holiday season (check out our Holiday Season Trading Schedule article) has taken a cautious turn, but there are signs that optimism is still being grasped. However, the trend lower in the NZD/USD has been rather consistent and betting on a sudden reversal to develop has likely proven painful for many speculators.
The U.S will release Retail Sales figures today and the anticipated number is expected to come in with a result that matches last month’s statistics. Forex traders are likely not going to get too much impetus from the U.S data today and instead will focus on existing behavioral sentiment. Barometers such as gold and U.S Treasury yields should be monitored. Gold declined in value yesterday and this shows nervousness which might be a sign that large traders are worried about the recent strength of the USD. However, gold remains above 2000.00 USD which is a positive signal.
Support Levels will be Crucial for the NZD/USD Near-Term
Traders should keep their eyes on support levels the NZD/USD is bouncing along. A decline below values seen in the second week of December would sound alarms, but the speculative question is if it will happen. Many speculators may believe that current price levels will begin to generate durable values and the opportunity to wager on limited reversals upwards in the short and near-term.
- If the NZD/USD can begin to show some buying momentum and start to challenge the 0.61100 mark and then target the 0.61150 to 0.61200 realms and sustain values, this might begin to show a change in direction is brewing.
- NZD/USD should not get overly ambitious as they seek upwards movement in the short-term; particularly as nervous trading results are still being produced. Risk management is a key. Support next to the 0.61000 is important psychologically.
NZD/USD Short Term Outlook:
Current Resistance: 0.61150
Current Support: 0.61050
High Target: 0.61390
Low Target: 0.60890
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