The NZD/USD has held onto a majority of gains made since Friday when the USD strength suddenly came into question because of nervous market sentiment.
The NZD as of this morning remains within the boundaries of a higher short-term price range. The currency pair is near the 0.62150 ratio as of this writing, but like all of Forex the NZD/USD is experiencing plenty of price velocity due to an abundance of nervous market sentiment. The U.S Federal Reserve in the past couple of days has had its aggressive rhetoric stated only last Tuesday by Fed Chairman Jerome Powell, swept to the side and held up for reconsideration.
The banking crisis hitting the U.S. continues to create fragile behavioral sentiment and this comes on the heels of the U.S. government trying to eliminate risks and potential exposure to the global marketplace. The U.S. Federal Reserve is certainly in a position now in which consideration of a bigger interest rate hike next week of 0.50% has been put to the side. But there remains a potential hike of 0.25% taking place on the scheduled Fed meeting date of 22 March. However, some analysts are suggesting there will be no rate hike next week.
The NZD/USD has correlated to the broad Forex market as the currency pair has seen buying based on the perception the USD could be weaker moving forward if the U.S. Fed is forced to hit the brakes on interest rate hikes. However, data remains troubling and inflation appears stubborn, today’s coming Consumer Price Index readings from the U.S. will be important. If the inflation statistics come in stronger than expected today the U.S central bank may be tempted to raise by a quarter of a point next week.
- Dynamic trading in the NZD/USD should be anticipated by speculators today and tomorrow.
- Traders should be braced for the potential of a rather wide price range, which could produce whipsaw effects.
- Technical traders should keep an eye on the publication of the CPI numbers from the U.S. today.
Risk management today and the remainder of this week will be essential for all-day traders. Developing news has the potential to cause dynamic reactions in the NZD/USD like a sudden lightning flash. Traders who want to wager on a less aggressive U.S. Federal Reserve next week may be proven correct, but this could still prove wildly risky.
If the NZD/USD climbs higher today it might come on the back of weaker-than-expected U.S inflation data. However, if the data is stronger than expected via the U.S CPI results, fragile market sentiment could boil in Forex and the NZD/USD could become fast and actually traverse downwards with speed.
Current Resistance: 0.62420
Current Support: 0.61975
High Target: 0.62810
Low Target: 0.61645