The NZD/USD is trading near the 0.63950 level as of this writing, which is a stark difference compared to its lows on Friday which touched the 0.61900 vicinity. Before going into the weekend the NZD/USD finished around the 0.63500 mark. The currency pair turned in a solid reversal higher after U.S inflation data came in slightly lower than expected via Hourly Wages on Friday.
Another Gain this Morning in the NZD/USD
In early trading this morning the NZD/USD kept up its bullish momentum and climbed to a high of around 0.64100 before being pushed back. Prior to this morning, the last time the NZD/USD traded above the 0.64000 level was on the 19th of December. This is a solid indication that selling of the NZD/USD may have been overdone during the holiday season. The lows reached by the NZD/USD this past Friday had not been touched since the end of November.
Return of Full Volume and Important Data a Key for the NZD/USD
The lows touched on Friday likely reflected fears by financial houses that if U.S inflation data via the wages statistics was higher than expected it would put the U.S Federal Reserve in an aggressive mindset. The broad Forex market also reflected this belief as the USD got strong much of Friday, until the jobs publications. The fact the NZD/USD swiftly jumped in value is a healthy sign for New Zealand Dollar speculators showing it is working in correlation with most major currencies.
As the NZD/USD trades nearly in sight of the 0.64000 mark, traders should monitor this ratio. If the NZD/USD were to suddenly sustain value over this level it would be a potentially bullish sign of things to come for the currency pair. However, traders should remain cautious in the near-term.
- Full volume trading is set to return to Forex including the NZD/USD today and tomorrow, and this will impact results as fair equilibrium is sought by financial houses after being absent from the market the past couple of weeks.
- This coming Thursday the U.S will report Consumer Price Index numbers and this will affect the NZD/USD swiftly based on its results.
On the 13th of December the NZD/USD was trading briefly above the 0.65000 level. Traders should not be tempted to aim for this higher price level in the short-term. Speculators need to remain realistic regarding their targets. If the NZD/USD can maintain its current price range this may be a solid bullish indicator, but it is likely only a weaker than expected inflation report from the U.S this coming Thursday could ignite a much stronger move higher.
Until Thursday traders should anticipate the NZD/USD to remain choppy and test its current range. Perhaps buying the NZD/USD after slight reversals lower may be attractive in the short-term for day traders who use solid risk management.
NZD/USD Short-Term Outlook:
Current Resistance: 0.63975
Current Support: 0.63600
High Target: 0.64550
Low Target: 0.63250
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