Short-Term Gains within Lower End Price Range

The NZD/USD has traded slightly higher since New Zealand’s banking holiday on Monday, but the currency pair remains near its one month lows.

The NZD/USD is trading near the 0.60690 mark as of this writing. The currency pair traded at a low of nearly 0.60410 on Monday, but this occurred when New Zealand was on a bank holiday and volumes were relatively low. Yesterday the NZD/USD traded slightly higher and briefly touched the 0.61000 level before traversing a bit lower. The NZD/USD remains within plain sight of its one-month low hit on Wednesday of last week when a value of 0.59900 was penetrated lower.

Last week’s lows touched values not seen since the middle of November 2022.  Thus, before a speculator gets too optimistic about a sustained reversal higher about to come, they should note that behavioral sentiment has clearly taken a turn for the worse in the NZD/USD. This is not because the New Zealand Dollar has so much negative sentiment; it is because the USD has been strong across the board against most major currencies. The NZD/USD is correlating with many Forex pairs.

The NZD/USD has taken on a rather negative trend since early February when it touched a high of nearly 0.65440. This high happened just before the U.S. Federal Reserve started banging on its inflation drum loudly and warned financial institutions that a sudden reversal of its aggressive interest rate stance was not going to happen. While many analysts refused to believe the Fed, interest rate hikes and warnings of more increases have continued to happen. For the moment it seems financial institutions are in a ‘fog’ regarding the Federal Reserve’s decision next week.

• Having been able to break beneath the 0.60000 mark last Wednesday, should be a warning sign to traders who want to bet on strong upwards momentum being able to be sustained in the short and near term.
• There will be very limited data until next week from the U.S. (besides the June 14 Federal Reserve decision), so a cautious approach to trading the NZD/USD is a solid risk management decision.
• A range between 0.60000 and 0.61000 may remain the flavor of the day.

Speculators looking to wager on the NZD/USD in the short term should look for quick-hitting trades to take advantage of technical support and resistance levels.  The NZD/USD is likely to range trade without much strength being mustered in any one particular direction unless a major news event was to cause sudden impetus. If the NZD/USD begins to challenge support levels near the 0.60300 to 0.60200 realms, this might produce a test lower and the 0.60000 mark could be tested again.

Current Resistance: 0.60725

Current Support: 0.60510

High Target: 0.61100

Low Target: 0.60010

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