After last week’s run-up to a high of nearly 0.60555 on Wednesday, the NZD/USD has slithered lower. While incremental selling hit the NZD/USD with a slow pace on Thursday of last week, a sudden dive began in earnest later on that day, and by Friday the currency pair was around a low of 0.58830.
Monday’s trading this week saw a slight climb to the 0.59300 level. However, upon yesterday’s U.S. retail Sales figures coming in stronger than expected, the NZD/USD fell to a low of 0.58700. This depth essentially tested the lows from last Wednesday.
As of this writing the NZD/USD is near the 0.59100 ratio with rather tight choppy price action. Global markets continue to exhibit a solid amount of nervous sentiment which can be seen via higher U.S Treasury yields. Yesterday’s stronger-than-expected consumer spending from the States cemented the notion the U.S. Federal Reserve will increase the Federal Funds Rate on the 1st of November by a quarter of a point.
Strong U.S Economic Data Playing with the Emotions of Global Traders
The NZD/USD has produced a rather tight range early this week while sustaining values near lows. The resumption of the lower realms of the currency pair may appear attractive to speculators hoping for a bullish trend to emerge. However, last week’s election result that put a conservative government in charge of New Zealand was expected, and this has not fueled a strong NZD/USD yet.
Not even an All Blacks victory over Ireland in the Rugby World Cup on Saturday could spur on optimism. While the sports comment is written tongue in cheek, it is meant to highlight that NZD/USD is largely affected by U.S. economic data and the sentiment this generates within global financial institutions. The strong results from U.S. statistics underscore the problems the U.S. Federal Reserve faces. Higher interest rates in the States have not stopped inflation quite yet, and NZD/USD traders should consider their trading perspectives.
Trend vs. Range Speculative Positions Need to be considered by NZD/USD Traders
- Traders looking to take advantage of a sustained trend need to consider the possibility that testing the current price range of the NZD/USD in the near term remains a solid trading tactic.
- Support and resistance levels remain in play and until behavioral sentiment shifts in a dynamic fashion and risk appetite enters the global markets the NZD/USD may remain stagnant.
Perhaps the NZD/USD will remain within its known which has been prevalent since late in the second week of August. Support appears rather firm near 0.58700 and resistance durable near 0.60500. The puzzle is finding the right time to enter the NZD/USD to take advantage of the price realm.
NZD/USD Short Term Outlook:
Current Resistance: 0.59275
Current Support: 0.58970
High Target: 0.59810
Low Target: 0.58780
Ready to trade our daily Forex forecast? Here’s some of the best New Zealand forex brokers to check out.