The NZD/USD is trading within sight of the 0.58100 ratio as holiday trading dominates the Forex market and large financial players are absent from the landscape.
As of this writing the NZD/USD is near the 0.58100 level which is similar to where the currency pair traversed in the immediate aftermath of an upwards move during the U.S Federal Reserve’s FOMC decision on the 10th of December. The NZD/USD did climb to a high of nearly 0.58450 vicinity on the 24th of December.
The dates listed above show the importance of sentiment in the New Zealand Dollar. The NZD/USD while correlating to the broad market has also been suffering over the long-term from lackluster economic data from New Zealand. The NZD has been seen as a laggard in many circles. It ability to remain above the 0.58000 during this holiday season will be seen as a test by some analysts. Calm seems to have come for the moment to the NZD/USD.
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Lower Volumes and Volatility
Thin holiday volumes are being seen in the NZD/USD at this time and will not improve. New Year’s eve trading tomorrow will be extremely light as financial institutions stay away from participating in Forex. NZD/USD day traders looking to pursue the currency pair today and tomorrow should brace themselves for ultra quiet conditions, but with the threat of sudden outbursts.
The 0.58100 may become a testing ground via some technical perspectives for speculators. Wide spreads should also be anticipated by NZD/USD traders and this might last into next week until all financial institutions return from their New Year’s Day holiday.
Ability to Sustain Highs Important
The NZD/USD has sold off from its highs incrementally since last week, sustaining stronger values in the New Zealand Dollar has been problematic long-term. Looking for the 0.58000 level to be durable is important, but it also may remain a focal point for some large players who believe New Zealand is still suffering from lackluster economic data via outlooks.
- Meaning that when full volumes do reemerge in the NZD/USD if the 0.58100 fails to be sustained above, that the currency pair may face another challenge lower.
- Day traders should be quite conservative if they feel the need to participate today.
- Quick hitting trades may need take profit orders prices to actually be punctured by price action results in order to get filled today and tomorrow because of a lack of volume.
- The upwards ability of the NZD/USD the past few weeks has been a positive, but more impetus regarding behavioral sentiment taking an optimistic turn is needed to keep the currency pair near highs.
NZD/USD Short Term Outlook:
Current Resistance: 0.58125
Current Support: 0.58070
High Target: 0.58210
Low Target: 0.57015