Selling developed in the midst of the GDP report from New Zealand early this morning, the currency pair is around the 0.57650 mark as of this writing as global markets deal with nervousness.
New Zealand published their GDP statistics earlier today and a growth rate of 1.1% was the result, which was better than forecast. However, the NZD/USD has seen selling early today and is traversing near the 0.57650 ratio with typical fast quotes and a rather large spread demonstrated. The NZD/USD was around 0.58085 early on Monday when it suffered a swift selling surge lower, which then saw the currency pair testing the 0.57660 mark, yes, around the same value it now traverses.
Choppy trading has ensued all week. A move above 0.58000 was seen later on Monday and Tuesday’s highs challenged Friday’s apex values. But the NZD/USD has seen some selling develop since mid-Wednesday. But what may be viewed as problematic by day traders looking for correlations in the NZD/USD to the broad Forex market, is the noticeable technical perspective that the New Zealand Dollar is underperforming many major currencies which are doing better against the USD.
Broad Market Nervousness in Equities
There is essentially only a day and half of full market trading in Forex left before many financial institutions start to filter out of their offices for the holiday season. Trading volumes in the NZD/USD which are not superlative normally, will become even lower over the coming days. The selling seen this morning after a better than anticipated GDP result potentially shows financial institutions still do not hold an optimistic attitude about the New Zealand economy.
Yet this could prove to be a false narrative. Global markets are also showing signs of nervousness via equity indices as a response to less than good results on the major U.S indices. Caution could be a big factor in the NZD/USD not only because of rather murky economic outlooks for New Zealand, but an overall conservative view of risk appetite for the moment.
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Realm of 0.57600 as Opportunity
Speculators may be intrigued by support ratio close to where the NZD/USD is now trading. The NZD/USD did fall below the 0.56600 ratio briefly this morning and some day traders (and financial institutions) may view this level if challenged as oversold territory for the NZD/USD.
- The ability of the currency pair to test marks above the 0.58000 the past week, since the U.S Federal Reserve did lower their interest rate, is an intriguing target above.
- However, day traders should remain realistic.
- If a speculator wants to pursue upside and wants to practice caution, perhaps buying around perceived support levels and looking for limited upside might work. There will be reversals up and down intraday.
- It should be remembered that storm clouds lurk because of nervous sentiment via U.S markets, yes, a reversal upwards might happen within them too, but conditions may be tense today and tomorrow before going into the weekend.
NZD/USD Short Term Outlook:
Current Resistance: 0.57680
Current Support: 0.57600
High Target: 0.57800
Low Target: 0.57550
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