- The NZD/USD has continued to incrementally linger near lows and signal that bearish behavioral sentiment remains the dominant force within the currency pair.
- Certainly bullish advocates of the NZD/USD may believe conditions are oversold, but there has been a lack of strong reversal.
- Yesterday’s weaker than anticipated U.S Consumer Confidence numbers did not cause a lasting spark upwards in the USD/NZD.
The current value of the NZD/USD as of this writing is near the 0.60005 ratio. Without question the psychological level of 0.60000 is a focal point for traders of the currency pair and this will likely remain the case over the near-term. Tomorrow’s U.S economic data parade is being heavily anticipated. The U.S numbers will include growth and inflation figures from GDP reports. Also the weekly Unemployment Claims will be watched, because the Fed has started to put an emphasis on the jobs market regarding its monetary policy.
Weakness in the NZD/USD and Behavioral Sentiment
It is important to state that traders who believe the NZD/USD should not trade below certain depths need to make sure their bias is not blinding them to the trend which has been generated. The lower stance of the NZD/USD may feel like it is overdone, but financial institutions remain nervous about U.S Federal Reserve outlook. The anticipated dovish position of the Fed has started to erode. Tomorrow’s GDP numbers will be vital to existing sentiment.
Yesterday’s lows in the NZD/USD around the 0.59885 mark came within sight of depths seen on early Monday. Bullish traders may want to use the 0.50980 to 0.59960 levels as a place to look for quick hitting reversals upwards, but speculators should not get too ambitious. Until the U.S economic numbers are published tomorrow a large trend upwards is unlikely to develop, and if a trend is ignited higher it likely means the U.S growth numbers and inflation results have come in below expectations. The problem is that data from the States have proven wildly mixed recently, which has caused problems regarding outlook and choppy conditions for the NZD/USD. Risk management with take profit and stop loss orders needs to be practiced.
Near-Term Dangers as the Speculators Wait for Confirmations
- The NZD/USD is likely to remain within the lower realms of its short-term price range throughout the day as traders wait for tomorrow’s U.S data.
- Any strong moves upwards before the U.S GDP data is published will likely be only because of speculative wagers, which day traders should be suspicious of as they wager. Reversals could be fast in the near-term.
NZD/USD Short Term Outlook:
Current Resistance: 0.60050
Current Support: 0.59970
High Target: 0.60128
Low Target: 0.59865
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