The NZD/USD found buyers suddenly emerge late on Tuesday after U.S. negative economic data caused weakness for the USD, and gave bullish traders a sense that upside potential exists for the currency pair.
The NZD/USD is trading near the 0.62330 ratio as of this writing, after falling below the 0.61300 ratios yesterday. After challenging depths not seen since the 22nd of November, the NZD/USD suddenly ignited upwards. While some technical traders may point to this change of direction as an important reversal caused by a test of mid-term lows, fundament speculators will certainly highlight the CB Consumer Confidence readings yesterday from the U.S which were weaker than expected.
After the U.S. data showed that consumers feel less confident about their personal finances, the USD began to sell off rather powerfully. Intriguingly after achieving the move upwards late on Monday, the NZD/USD has sustained buying power in early trading today and is coming within sight of values not seen since last week. However, the value of the NZD/USD still remains under last week’s highs by a wide margin.
Resistance in Sight for NZD/USD Bullish Traders as Targets
Confident bullish traders may view yesterday’s ability to turn higher in the NZD/USD as a sign that better days are ahead once again for the New Zealand Dollar, but before a party is started some caution is advised. Yesterday’s U.S CB Consumer Confidence report is only one of many that will affect the NZD/USD in the coming days and weeks. The 0.62500 resistance level should be monitored by NZD/USD traders today.
- The ISM Purchasing Managers Index report will come from the U.S. today and its results will stir the NZD/USD.
- If the result matches expectations or comes in weaker than anticipated this could create a bit more NZD/USD buying.
- The U.S. Federal Reserve remains in an aggressive stance regarding inflation and until this data turns lower, the Fed may keep on increasing interest rates incrementally.
Speculators may be tempted to be Aggressive, but Caution is needed
Support for the NZD/USD could prove quite interesting in the near term. The buying action that was demonstrated late yesterday and early today demonstrates the NZD/USD may be considered oversold. The currency pair however still has room to climb before it can be considered within any type of bullish trend. However, if support proves durable in the near term around the 0.62300 to 0.62250 ratios, this could be a place where traders who want to be buyers and are cautious, decide to pursue some upwards momentum.
Today’s U.S. manufacturing survey results should be monitored. Choppy trading is likely until the statistics are published, but if the NZD/USD continues to fight around its short-term highs and a negative ISM Manufacturing Index report is produced, the currency pair may suddenly find additional upside power generated.
NZD/USD Short-Term Outlook:
Current Resistance: 0.62410
Current Support: 0.62175
High Target: 0.62655
Low Target: 0.619885
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