After touching lows late last night the NZD/USD has recovered some ground as a speculative battle becomes technically demonstrated while equilibrium is sought.
- The NZD/USD exchange rate dove to a low of nearly 0.60333 last night, but has since recovered slightly and is now around the 0.60728 ratio.
- Trading in the currency pair has been rather challenging the past week as a doses of volatility have confronted speculators.
- The NZD/USD climbed to a mark of nearly 0.61350 last Thursday when U.S inflation data came in weaker than anticipated.
- However, the currency pair did not come close to challenging highs seen on Monday the 8th of July when a short-term apex of 0.61535 was approached.
Early this morning New Zealand published inflation data via the Consumer Price Index and it came in with a 0.4% gain compared to the expected rise of 0.5%. This outcome is another bit of ammunition for the Reserve Bank of New Zealand to consider becoming dovish sooner rather than later. Yet the consideration of the RBNZ cutting interest rates needs to be weighed against the perception the U.S Fed may become dovish too.
NZD/USD Price Range Perspectives
While the downturn in the NZD/USD when a one and three month chart is contemplated appears steep to some, the move lower had shown a rather durable amount of support near the 0.60500 until yesterday. The move lower late in the night did penetrate support levels which may mean financial institutions are nervous. Trading the remainder of today and tomorrow should be watched closely as financial institutions consider their outlooks.
It is likely many short-term traders will look at the NZD/USD and believe it is oversold. The ability of the currency pair to move slightly higher this morning is intriguing, but resistance near the 0.60800 level has looked strong in the short-term. Some traders may still be aiming for a retest of the 0.61000 vicinity, but this may prove overly ambitious for folks who want quick hitting trades and are using leverage.
Behavioral Sentiment and the NZD/USD
There will be some economic data from the U.S via Industrial Production figures today, but the major impetus for the NZD/USD in the near-term is likely going to come from existing behavioral sentiment. Choppy prices have dominated the NZD/USD but what might appear to be a wide range to a day trader may seem like a rather comfortable value chart to financial institutions.
- The NZD/USD started this week near the 0.61100 ratio and has incrementally traded lower.
- Until resistance is brushed aside and sustained over the 0.60800 mark day traders should remain cautious if they want to pursue bullish positions.
NZD/USD Short Term Outlook:
Current Resistance: 0.60790
Current Support: 0.60690
High Target: 0.6110
Low Target: 0.60510
Ready to trade our Forex daily analysis and predictions? Check out the best forex brokers in New Zealand worth using.
