After stumbling to a low this morning of nearly 0.59300 the NZD/USD has reversed slightly higher and as of this writing is near the 0.59870 ratio. The lower depths reached earlier today challenged values last seen in the second week of November 2022. Speculators who have believed the NZD/USD has been oversold since starting its downward trajectory on the 13th of July may be getting ready to ignite buying positions.
However, before NZD/USD bullish traders begin to pursue upwards momentum, they should note that a solid amount of risk-averse nervous sentiment remains in the global markets. While support levels may look tempting and the notion the U.S. Federal Reserve is going to become less aggressive over the coming months is a tempting idea, there are no guarantees when a sustained reversal will take place.
Day traders last week who sought upwards momentum early in the week were rewarded when the NZD/USD went from nearly 0.60630 on Wednesday to a high of almost 0.61220 momentarily on Thursday. But timing short-term wagers needs to be done with proper risk management and preparation of reversals which can go against the intended direction quite suddenly.
RBNZ Keeps Policy in Place and the NZD/USD Responds with Consolidation
Price velocity upwards has not been too strong this morning in the NZD/USD and the 0.60000 level is now a likely focal point for day traders who are not using excessive leverage. However, the NZD/USD has been in a solid downward slope for slightly more than one month and the currency pair is unlikely to sustain a trend upwards until behavioral sentiment begins to shift in the global markets. Traders who want to pursue upwards momentum cannot be blamed, but they should certainly not be too ambitious and be willing to cash in polite profits if they materialize.
Lows this Morning Tested Vital Short-Term Support in the NZD/USD
- Lows produced this morning penetrated lows seen on Monday and yesterday in the NZD/USD. Meaning nervous selling remains part of the trading landscape in financial institutions that would like more clarity.
- Support ratios of 0.59800 to 0.59600 could prove to be ignition areas for traders who want to bet on reversals higher, but they should remember that in November of 2022, the NZD did trade at substantially lower values.
- Speculators who believe the NZD/USD is oversold should be careful in the near term and look for sustained momentum higher. Betting against the current trend remains dangerous until nervous sentiment decreases globally.
NZD/USD Short-Term Outlook:
Current Resistance: 0.59975
Current Support: 0.59810
High Target: 0.60420
Low Target: 0.59450
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