- After trading near the 0.60380 ratio on Monday and sustained lower depths well into Tuesday, the NZD/USD has produced some upside over the past twelve hours.
- The current price of the currency pair is near 0.61040, which essentially means the NZD/USD is traversing within values seen in the last week of November and the middle of December 2023.
The NZD/USD is certainly near important mid-term support levels and some bullish speculators may believe there is plenty of cause to look for upside price action, but the impetus for a strong surge of momentum upwards is still lacking. While the mid-term outlook for the USD remains weaker in the eyes of many analysts, waiting on the U.S Federal Reserve to change its monetary policy is rather difficult for day traders. Financial institutions which indulged in the belief the Fed would cut rates in March have had cold water thrown on this mindset, because it now appears May might be the month an interest rate cut comes from the U.S central bank.
USD Centric Thoughts and Data Considerations for the NZD/USD
Employment data from New Zealand released early this morning came in with a higher Labor Cost Index result, but the Unemployment Rate came in below expectations with a 4.0% number. However, the NZD/USD while likely reacting to this data a bit, largely remains in a USD centric mindset like the broad Forex market. The USD has been strong the past month due to the belief it had been oversold in December.
The ability of the NZD/USD to hit low water marks below the 0.60400 level was noteworthy earlier this week, and the question is when and where support levels will begin to prove durable again. While some traders may want to consider selling the NZD/USD because of its recent trend lower, the question that also needs to be asked is if there is much more downside value to be found for speculative bears.
NZD/USD and the 0.61000 Level as a ‘Barrier’
Yes, the NZD/USD is trading slightly above the 0.61000 ratio as of this writing, and some day traders may be tempted to look at this value as support. Perhaps 0.6100 will continue to generate a lot of price action in the near-term because it is a psychological level. Using the value as a barometer for short-term wagers today may prove to be worthwhile, risk management is needed.
- If the 0.61000 level holds as support today it may signal some financial institutions believe the NZD/USD has been oversold and are anticipating a move higher.
- However there is a lack of important economic data coming from the U.S today, meaning traders looking for potential upside should not get overly ambitious quite yet.
NZD/USD Short Term Outlook:
Current Resistance: 0.61085
Current Support: 0.61000
High Target: 0.61210
Low Target: 0.60770
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