NZD/USD: Mid-Term Support Levels Continue to Be Challenged

The NZD/USD has suffered a significant fall in value the past week and mid-term support levels continue to be challenged.

The past two weeks of trading within the NZD/USD have seen bearish volatility ensue. On the 17th of March, the NZD/USD was trading near highs of 0.72600, but by the 25th of March, the Forex pair was traversing near lows of 0.69420. The move lower was violent with the swiftest part of the decline taking place on the 22nd of March. The rather dramatic loss of value within the New Zealand dollar occurred after the government issued new mandates regarding the property market which sent a shiver through the banking sector.

As of this morning, the NZD/USD has shown an ability to achieve a relatively comfortable support juncture near 0.69700 as the Forex pair trades within sight of the 0.70000. The question speculators are no doubt asking now is if the risk/reward potential of the NZD/USD favors buying positions. Technical traders cannot be blamed for thinking the worst of the news has been generated and the NZD/USD, which has displayed a significant bullish trend, has room to re-establish the trajectory.

However, after showing signs of potentially building a rather stable move upwards and challenging February values, the NZD/USD is still significantly below its March high of 72.88000, which was seen very early in the month. Traders who believe the upside has potential should use proper risk management and be aware that the Forex pair is near important support values not seen since late November of 2020.

The rapid fall in value of the New Zealand dollar definitely offers speculators a chance to practice their technical perspectives in full. The USD has been stronger in global Forex recently due to the gyrations occurring in the US Treasury market. This element adds another dose of caution to the notion that the NZD/USD will rapidly achieve a renewal of its bullish momentum.

However, speculators who are willing to fight against the short-term trend and use proper risk management techniques may find that buying the NZD/USD at its current price values does offer a worthwhile wager. Cautious traders should wait for some pullbacks in value to enter their buying positions of the NZD/USD and use conservative stop losses to protect against additional falls in value. The 0.70000 mark does look like a tempting target for bullish speculators and, if it is broken higher, traders could target values near the 0.70160 level with quick-hitting trades.

NZD/USD Short-Term Outlook:

Current Resistance: 0.70300

Current Support: 0.69700

High Target: 0.71000

Low Target: 0.69300

NZD/USD

Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.