The NZD/USD has traded slightly lower since its highs achieved on Friday, this after the weaker than anticipated U.S Non-Farm Employment Change Numbers and Average Hourly Earnings reports.
- After touching a high of nearly 0.60490 momentarily on Friday within the NZD/USD the currency pair has seen incremental selling.
- Friday’s highs were achieved on the muscle of financial institutions looking at the weaker than expected U.S jobs data and perhaps contemplating the notion that NZD/USD actually had some light ahead and could be speculatively bought.
- The currency pair on Friday touched values last seen on the 10th of April.
While true the NZD/USD has given back some of its gains and is again trading below the 0.60000 level, the currency pair actually did not see a violent amount of selling and it remains near a tantalizing psychological ratio. The notion the NZD/USD remains within oversold territory will attract speculative attention. The current price of the NZD/USD is around 0.59930.
Downward Trend and a Potential Reversal of Fortune in the NZD/USD
The NZD/USD does have a tendency to create rather demonstrative trends depending on technical perspectives. Traders who look at one, three and six month charts, even if they are a day trader can see rather clear trends sometimes exhibited. The NZD/USD has been within a lower trend since the beginning of January, and this has largely developed on the back of the strength from the USD which has been resilient due to the belief the U.S Federal Reserve would not be able to alter its monetary policy.
While nothing will likely happen via the Federal Reserve regarding its Federal Funds Rate in June, financial houses may have shifted their outlooks slightly when they saw U.S wages come in slightly below expectations this past Friday. Inflation remains troubling in the U.S and this is affecting the NZD/USD like all of Forex, but it is possible financial institutions may again be ready to practice some optimism, which means they may start leaning towards a weaker USD viewpoint. The U.S will see the University of Michigan Inflation Expectations reading this coming Friday.
NZD/USD Headwinds about to Grow Weaker
Last week’s highs were a clear example of short-term bullishness in the NZD/USD. The selling which has been seen afterwards shows the NZD/USD still faces headwinds, but they may be ready to start eroding. Speculators may feel attracted to the currency pair because of its current price ratios challenging support levels.
- Wagers for higher momentum in the short-term that believe the NZD/USD will not return to its lowest depths seen from mid-April until the end of the month may prove correct.
- Speculators who have the ability to launch wagers on the upside, when support levels are tested in the short-term should be careful and practice quick hitting bets, but technically this could also prove efficient.
NZD/USD Short Term Outlook:
Current Resistance: 0.59960
Current Support: 0.59885
High Target: 0.60090
Low Target: 0.59830
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