As of this writing, the NZD/USD is trading near the 0.70300 juncture and has been choppy the past week. After falling to a short-term low of nearly 0.69450 on Friday, the NZD/USD put in an incremental climb the past couple of days and produced a high of around 0.71010 yesterday. However, after reaching its apex yesterday, which tested mid-June prices the NZD/USD then swiftly declined to a low near the 0.69900 ratio.
Since reaching a high of nearly 0.73200 in late May, the NZD has incrementally traded lower and consistently brushed aside support. However, and intriguingly, the NZD/USD touched a low of approximately 0.69200 on the 18th of June. And this support level has remained rather durable, the only time it came close to being tested was on the 2nd of July, but the lower depths were not penetrated. This leaves the door open for technical traders who believe the USD/NZD may be swimming within the lower depths of its value and support ratios may provide an opportunity to buy the Forex pair.
The junctures of 0.070200 to 0.70000 could prove to be a rather solid inflection point for short-term traders. Yes, last Friday saw lows below these values, but that took place when financial institutions were positioning their cash before the U.S jobs report was published. The ability to climb from these lows may provide a key speculative ingredient. Yesterday’s highs and then sudden reversal may have been natural reactions to gains which were perceived as overbought.
However, the speed of the reversal lower and the ability of the NZD/USD to trade within a rather tight band early today suggest that additional fluctuations are bound to occur. Buying the NZD/USD on slight drawdowns if the Forex pair tests current support levels appears to be attractive. Traders certainly need to be on the lookout for velocity coming into the market. If support of 0.69900 is broken lower, it could be a sign that other depths will be tested short term.
Conservative traders who believe the NZD/USD has better risk/reward scenarios within its current lower price range may be tempted to pursue buying positions. Speculators should use limit orders with the NZD/USD to guard against sudden spikes, but placing a buying order slightly below current market prices and aiming for nearby resistance could prove worthwhile.
NZD/USD Short-Term Outlook:
Current Resistance: 0.70600
Current Support: 0.70100
High Target: 0.70950
Low Target: 0.69850
