The NZD/USD stumbled lower in the past two days as the Reserve Bank of New Zealand was expected to raise their interest rate by another 0.50% earlier this morning. Intriguingly while the NZD/USD currency pair is trading within sight of short term lower values, the technical trend has actually incrementally ticked upwards the past twelve hours. The upwards movement started to occur before the central bank actually raised their borrowing costs.
The interest rate hike from New Zealand’s central bank was widely anticipated and now that result is official, it appears the NZD/USD can be expected to potentially retrace higher ratios it has recently seen which were higher. On the 12th of August the NZD/USD was trading near the 0.64650 mark, this before it started to tumble as the weekend began. Yesterday saw a low of approximately 0.63180. Early morning volatility was certainly on display earlier today, but the fireworks may become less pervasive in the coming hours.
The NZD/USD is Straddling Important Higher Support Levels via a One Month Chart
While the lower move the past couple of days may have made bullish speculators nervous, the ability of the NZD/USD to find support near the 0.63200 level could prove important. Yes, there will be reversals lower, which a natural part of the trading day, but if current support ratios prove durable this could spark the speculative notion the NZD/USD remains oversold.
- If the NZD/USD is able to hold the 0.63450 to 0.63350 vicinity as durable support, more buying of the Forex pair could emerge.
- Traders cannot be blamed for targeting the 0.63750 to 0.63850 level as short term upwards goals if they choose to be buyers.
Upward Trend of the NZD/USD could prove Attractive to Speculative Bulls
The NZD/USD was near the 0.62100 level on the 5th of August, which was a depth tested since the 29th of July and proved rather consistent as support. Since the 5th of August the NZD/USD has incrementally been able to gain and raise its technical support levels. This morning’s continued climb from lows seen yesterday may signal additional bullish behavior is favored by financial houses as they consider the outlook of the Reserve Bank of New Zealand as it proves to be hawkish.
Traders should remain realistic regarding their speculative ambitions. The NZD/USD is able to become volatile and moves downward will certainly occur, but wagers on upside price action based on the belief that support is beginning to look technically stronger could spark more pursuit of perceived resistance which appears vulnerable and within grasp. Traders looking for additional upside momentum in the near term cannot be blamed.
NZD/USD Short-Term Outlook
Current Resistance: 0.63780
Current Support: 0.63330
High Target: 0.64120
Low Target: 0.63075
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