The NZD/USD may have tested the patience of speculators who have been pursuing upwards momentum the past week, but a sudden burst upward has likely pleased many now.
The NZD/USD is trading near the 0.63200 level as of this writing. Trading within the currency pair has endured a rather challenging test of its trend over the past week. The past month and a half have produced a rather significant bullish move higher, but price action last week was blocked as New Zealand implemented a steep interest rate hike, and questions remained partially unclear regarding U.S Federal Reserve policy.
Question Resolved and Mid-Term Clarity Better for NZD/USD
U.S Fed Chairman Jerome Powell confirmed in a speech yesterday that the U.S central bank is likely about to become less aggressive regarding interest rate policy. His words set off a firestorm in Forex, and the NZD/USD quickly reacted with buying on the confirmation which financial houses have been wagering on the past handful of weeks. The NZD/USD which had been trading near a low of about 0.61900 climbed abruptly.
The NZD/USD has the ability to move rapidly and the price velocity of the currency pair the past half day has been dramatic. However, now that a confirmation has been voiced by the U.S Federal Reserve regarding interest rates and technical resistance became vulnerable, the NZD/USD may need a bit of time to find equilibrium. Bullish traders who were lucky enough to have buying wagers working in the NZD/USD yesterday have hopefully cashed in their profits if they are day traders.
August Values are being tested by the NZD/USD as Thoughts about Resistance Emerge
On the 11th of August, the NZD/USD was trading near the 0.64625 ratio, just before it began a substantial stumble lower. Traders may be looking at the August highs as a potential area the NZD/USD can attain again. However, traders should remain cautious and not be overly ambitious. Looking for incremental gains with quick speculative positions not held overnight could prove to be a safer way to wager for those without deep pockets of cash to wait for positions to produce results.
- Resistance levels near the 0.63350 to 0.63400 in the short-term may feel like compelling targets for traders, solid stop losses are urged because the NZD/USD will not produce a one-way avenue upwards, and reversals lower are sure to be seen.
- Support near the 0.63100 to 0.63000 levels should be monitored, if they prove durable in the short term this could spur more buying action. A move below these junctures may be a sign that the jump higher the past half-day is viewed as having been too fast.
The NZD/USD continues to offer opportunities for traders who enjoy the currency pair. Price action the past week was extremely challenging for speculators with the bullish sentiment but patience has been rewarded, and conditions may be ripe for more incremental moves higher in the near term.
NZD/USD Short-Term Outlook:
Current Resistance: 0.63400
Current Support: 0.62900
High Target: 0.64355
Low Target: 0.62450
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