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The NZD/USD has maintained its gains after yesterday’s solid reversal higher, this as behavioral sentiment globally has shown signs of improvement.
NZD/USD speculators may be in the mood for more risk-taking in the short term as financial houses seemingly have brushed aside their concerns for the moment and indulged in buying. The NZD/USD came off of early lows on Monday and incrementally began to climb. The upwards rise occurred after a sharp burst of selling happened on Friday taking the NZD/USD to a low of nearly 0.61900 and remaining near this floor before going into the weekend.
While yesterday started off with more negativity and the NZD/USD falling to about the 0.61815 ratios, the currency pair began to pick up and show bullish momentum. Clearly, the global marketplace is not out of the woods yet, and concerns remain regarding the health of the corporate banking sector, but the day of ‘sunshine’ has been welcomed and the NZD/USD has enjoyed the optimistic air.
Intriguingly perhaps for speculators who are technically inclined is the notion the NZD/USD remains in the lower realms of its three-month chart. In early February the NZD/USD was near the 0.65350 vicinities but began to slide lower as fears started to weigh on financial institutions regarding the monetary policy outlook of the U.S Federal Reserve. The chance the U.S. central bank could remain aggressively diligent regarding interest rate hikes into the summer months was seen across the Forex market as the USD got stronger.
The downturn of the NZD/USD certainly correlated to the broad market. The ‘dark’ days of February and March have not been forgotten, but traders by nature are optimists, so the ability to speculate on buying positions might be welcomed. Support levels near the 0.62150 to 0.62025 ratios should be watched, if these barriers prove durable in the short term, it could spark additional speculative buying.
- The global market sentiment did improve yesterday, but it will take another couple of positive days without ‘fears’ being heard about the corporate banking sector to stabilize concerns.
- If the support level of the NZD/USD holds and behavioral sentiment remains steady, the currency pair could experience another wave of upwards momentum in the near term.
The NZD/USD is a speculative favorite of many experienced Forex traders, but they are urged to remain cautious in the near term and not become overly ambitious. Global market conditions remain fragile and seemingly one strong gust of wind could send the market in another direction if fears suddenly emerge. The past two weeks of trading have been challenging. The upside ability of the NZD/USD does look tempting and narrow price targets may prove worthwhile, but conservative leverage is urged and stop loss management is important for all traders.
Current Resistance: 0.62390
Current Support: 0.62125
High Target: 0.62710
Low Target: 0.61850
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