The NZD/USD has attained near-term lows as of this writing and the price of the currency pair is around the 0.62275 mark. This low follows a high attained on Friday of nearly 0.64120, a value not seen in the NZD/USD since early February of 2023. Correct, the higher price of the NZD/USD failed to sustain its momentum in trading early this week, and the lows now being touched have brought the Forex pair into its ‘known’ range.
Conservative Traders Should be Careful, Speculators may want to Bet
The ability of the NZD/USD to fight upward last week and produce highs should not be completely disregarded. Perhaps financial institutions early this week believe the buying of the NZD/USD was too over-exuberant, but it also may have been a sign that behavioral sentiment is looking for reasons to ignite a higher trajectory for the NZD/USD which failed to be sustained for the moment.
The U.S. Federal Reserve is expected to raise interest rates next week, but there is reason to suspect this may be the last curtain call for the aggressive U.S. central bank this year. Yes, inflation remains a concern, but recent U.S. data has become rather complex and points to the possibility that price pressures higher may soon start to erode.
NZD/USD Price Range is Alluring for Bullish Perspectives
Consumer Price Index data from New Zealand today showed a slight uptick. While the Reserve Bank of New Zealand is not expected to hike interest rates in the short or mid-term, the potential of a more dovish U.S. Federal Reserve may balance concerns regarding interest rate differentials. The NZD/USD has sold off rapidly over the past two days and is touching a low not seen since the 12th of July, but that is only one week ago. The selloff which has occurred the past couple of days could be happening based on some profit-taking being done by financial institutions.
Bullish speculators who anticipate higher moves in the NZD/USD may suspect selling has been too strong. There are no guarantees another reversal higher will happen in the short term, but the prospect of the NZD/USD establishing support and then bouncing upwards again is rather intriguing. However, betting against the trend is always dangerous and traders who want to step in front of the current price action need to use stop-loss orders.
- Economic data from the U.S. for the remainder of this week will be quiet except for housing numbers today and tomorrow.
- Support near the 0.62200 to 0.62100 ratios should be watched in the NZD/USD, if these prices can be sustained traders may be tempted to look for upside movement.
- Speculators should not be overly ambitious if they are pursuing momentum higher to develop.
NZD/USD Short-Term Outlook:
Current Resistance: 0.62425
Current Support: 0.62225
High Target: 0.63010
Low Target: 0.61990
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