A short-term burst higher yesterday put the NZD/USD near the 0.58965 mark; this after the U.S. Federal Reserve held its Federal Funds Rate in place and tried to sound hawkish via its FOMC Statement. Although the Fed is talking tough about inflation and the potential of having to raise interest rates again, it appears financial institutions are starting to believe the last of U.S. Fed hikes have been seen. Currently, the NZD/USD is around the 0.58845 mark.
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Before jumping higher yesterday the NZD/USD was trading near the 0.57890 ratio, which came within shouting distance of a lower mark seen the previous Wednesday on the 26th of October when the currency pair was around the 0.57735 area. The low on the 26th had last been seen in the first week of November 2022. Yesterday’s depths were likely caused by risk-adverse positions being taken in preparation of any possible surprises from the U.S Fed, but also were consistent with lackluster economic data from New Zealand continuing to be seen.
Jump Higher and Bullish Expectations to Come in the NZD/USD
The move higher for the NZD/USD was a welcome relief to bullish traders of the NZD/USD who have been struggling to find optimistic signs. While the currency pair has not been able to penetrate the 0.59000 level in the short term, it is likely speculators are aiming for this target if they believe the NZD/USD has been oversold in the past couple of months.
The U.S will release its weekly Unemployment Claims results today, but it is tomorrow’s Non-Farm Employment Change and Average Hourly Earnings reports that will shake Forex and create volatility in the NZD/USD. If these jobs numbers from the U.S tomorrow come in below expectations this could help the NZD/USD find additional fuel to move higher.
The Average Hourly Earnings publication while not getting a lot of fanfare could be a catalyst if the inflation statistic regarding wages comes in less than expected. Even if the number simply meets its estimate this could be considered a good outcome by financial institutions who are more worried about potentially higher inflation than expected.
Resistance near the 0.59000 Level for the NZD/USD
- Day traders who are watching the 0.59000 ratio are justified.
- The NZD/USD can move fast and buyers of the currency pair should use take profit orders perhaps slightly below this level to cash out profits if they materialize.
- A sustained move over the 0.59000 level may be anticipated but could prove overly ambitious in the short-term.
- Tomorrow’s U.S jobs numbers will certainly factor into tomorrow’s trading, and if the numbers are stronger than expected this could actually cause additional headwinds for the NZD/USD in the near-term.
NZD/USD Short Term Outlook:
Current Resistance: 0.58960
Current Support: 0.58670
High Target: 0.59310
Low Target: 0.58420
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