A tight near-term price range has taken hold of the NZD/USD, as it appears financial institutions are allowing current market conditions to remain intact as they await tomorrow’s U.S. Consumer Price Index data. The NZD/USD over the next hours is likely to continue producing a test of current support and resistance levels. The NZD/USD dropped to a low of nearly 0.61800 in absurdly volatile trading last Friday upon the publication of the U.S jobs report and then launched higher and hit a mark of nearly 0.62780 within a couple of hours before going into the weekend.
The reason why the Non-Farm Employment change price action is described above is to highlight what could take place tomorrow when U.S inflation data is presented. Light holiday trading caused rather suspicious results, and this week’s early price action shows financial institutions are waiting for tomorrow’s CPI results to confirm their mid-term outlooks. Until then consolidation via NZD/USD values is likely to hold.
A wider Range in NZD/USD Will Certainly Take Place
Traders need to brace for fast conditions to begin emerging in the NZD/USD on Thursday. While speculators participating in the NZD/USD today will get a chance to test short-term technical perspectives, the spread in the currency pair will begin to widen tomorrow and price velocity is a certainty.
Short-term support should be watched near the 0.62400 level, if it proves durable it may be a signal traders are anticipating upward momentum to develop in the NZD/USD. If resistance near the 0.62580 mark begins to be challenged, the NZD/USD could begin to target higher ratios. Financial institutions that had developed a weaker USD outlook still may be expecting the NZD/USD to climb higher, and they may be ready to strike in mass, but for the moment they will be cautious.
Day Trading will get Dangerous in the NZD/USD
Day traders who want to participate in the NZD/USD today cannot be blamed. Bullish traders still may believe the NZD/USD has further room to recapture value seen only a couple of weeks ago, but before tomorrow’s inflation numbers from the U.S they should be careful and not overly ambitious.
- Traders looking for higher ground in the NZD/USD today should use quick-hitting take profits, because reversals lower coming back to perceived support will likely continue short-term.
- Tomorrow’s trading will certainly see fast action before and following the U.S CPI numbers. Financial institutions are likely braced for a stronger NZD/USD, but consolidated results over the past two days underscore the nervousness for the moment.
NZD/USD Short Term Outlook:
Current Resistance: 0.62580
Current Support: 0.62450
High Target: 0.62810
Low Target: 0.62230
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