- The NZD/USD is trading near the 0.60765 ratio as of this writing.
- The current value of the NZD/USD has recovered some ground upwards after yesterday’s plunge lower which saw the 0.60500 vicinity challenged.
- The dramatic selling momentum was sparked by the stronger than expected U.S Consumer Price Index reports on Tuesday.
Global financial institutions were rocked by the stubborn inflation data which was published in the U.S, and the broad Forex market as a consequence witnessed volatile trading across the board as the USD gained in strength. The NZD/USD was trading near the 0.61225 ratio before the publication of the U.S economic numbers. The price velocity of yesterday’s NZD/USD produced a lightning bolt downwards and traders who were holding long positions were likely hurt.
More U.S Data Coming and the Reserve Bank of New Zealand
Earlier this week the Reserve Bank of New Zealand warned financial institutions that inflation in the nation was still too strong. The central bank will announce their monetary policy decisions in about two weeks. The Reserve Bank of New Zealand has a reputation for being a proactive global central bank. Yesterday’s strong inflation results from the U.S may allow the RBNZ to strongly consider raising their interest rate by a quarter of a point at the end of February. Trading earlier this week in the NZD/USD did see some buying action which may have been prodded by the central bank’s rhetoric.
Retail Sales figures will be released in the U.S on Thursday and if consumers show they have been spending more than expected this could further complicate Forex trading including the NZD/USD. On Friday the U.S will issue its Producer Price Index inflation numbers. Many global financial institutions are nervous about mid-term Federal Reserve Policy. The NZD/USD challenged important lower depths yesterday; the ability of the currency pair to reverse slightly higher is technically intriguing.
NZD/USD Near-Term Considerations
The NZD/USD is likely to remain rather fragile and see choppy conditions over the next day. The 0.61000 level above may prove to be an overly ambitious target higher today. A high around 0.60880 was seen early today but then experienced headwinds.
- Traders may have to consider the current lower price realm of the NZD/USD will be dominate the next couple of days, this as U.S Retail Sales are awaited on tomorrow and PPI Friday.
- Yesterday’s trading was violent; risk management needs to be used in a secure manner in the near-term.
- Quick hitting wagers in the short-term may prove to be effective for speculators. Some traders may be tempted to wait for perceived technical support to be tested to look for slight reversals higher.
NZD/USD Short Term Outlook:
Current Resistance: 0.60820
Current Support: 0.60705
High Target: 0.60920
Low Target: 0.60590
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