The NZD/USD continues to demonstrate a bearish trend and is traversing near important lows. As of this writing the NZD/USD is moving slightly above the 0.61000 ratio, but readers need to compare this written price compared to the Forex market to get a feel for the ever changing price action.
However, the trend of the NZD/USD currency pair does remain downward. While reversals will no doubt be sparked upwards, the NZD/USD is within sight of lows not seen since the abrupt spike to depths of 0.60550 on the 14th of July. Moves upwards may not be able to generate an aggressive pace.
NZD/USD may Feel Oversold, but these Depths have been Demonstrated Before
Speculators who remain focused on bullish momentum may want to reconsider their perceptions; one of their first chores may be to make sure they have eliminated any bias they may have in favor of the New Zealand Dollar. Certainly, it is tempting to think the NZD/USD has been oversold, but the reality is that the Forex pair has explored these depths before. Not only did the NZD/USD trade lower in July of this year, but during the height of coronavirus fears a ratio of 0.58000 to 0.60000 was seen from March until May of 2020.
The Temptation to say this time is Different may be wrong regarding the NZD/USD
While traders may say the depths the NZD/USD reached during coronavirus are completely different compared to the current trading conditions, they might be wrong. Global economic conditions remain lackluster, and the potential future interest rate hikes from the U.S Federal Reserve have fueled a strong USD. It may have been fashionable to believe skeptically the U.S central bank would back away from its hawkish rate policy in the middle of August when the NZD/USD hit a high of nearly 0.64700, but this upper value looks remarkably hard to grasp for the time being.
- ANZ Business Confidence statistics from New Zealand came in negative yesterday. Tomorrow the U.S will release important jobs data which will impact the NZD/USD.
- Support near the 0.61000 level should be monitored; if this ratio falters and value is sustained below it could spark additional bearish sentiment.
The trend in the NZD/USD remains on a downwards trajectory. While it might be tempting to look for quick hitting upside reversals, the more worthwhile wager near term may be to continue pursuing lower price targets. Risk management is certainly needed, and traders should use entry price orders to make sure their fills meet expectations. If support near the 0.61000 is penetrated lower, traders cannot be blamed for setting goals near lows already demonstrated earlier today.
NZD/USD Short Term Outlook:
Current Resistance: 0.61170
Current Support: 0.60910
High Target: 0.61250
Low Target: 0.60400
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