NZD/USD: Stumble To Long-Term Support Raises Some Eyebrows
Date
5/30/2023 8:16:06 AM
(MENAFN- Daily Forex) The nzd/usd finds its value near levels it has not seen since the middle of November last year. The current price of the NZD/USD is around 0.60260 as it hovers at depths which may be causing speculators to believe the currency pair is oversold. On the 11th of May, the NZD/USD was trading near the 0.63915 mark, but since then has moved lower with its steepest decrease taking place last Wednesday the 24th of May, when the Reserve bank of New Zealand announced it would stop raising interest rates moving forward. Advertisement take advantage of today's market opportunities start trading now However, before speculators assume the trend downwards is bound to continue in a dynamic manner there are a couple of considerations to think upon.
There is a chance that risk-averse selling took place in the NZD/USD due to the debt crisis concerns in the U.S., and this seemingly is about to be taken care of with an agreement on Wednesday which is said to be waiting for approval. Two and a contradictory thought which could provide additional caution is the rhetoric coming from the U.S. Federal Reserve which remains rather aggressive. Traders have conflicting signals to interpret, which will not make things easy in the short term.The NZD/USD Challenge of November Prices is a Warning Sign Perhaps the selloff of the NZD/USD to its current realms has washed away a lot of the speculative buying of the currency pair via financial institutions, which were betting on the U.S. Fed having to become more dovish.
Inflation concerns in the U.S. remain valid, but so do the ramifications of higher interest rates and their negative effect on U.S. corporate banks of mid and small sizes. Also, the high borrowing costs are hurting U.S. consumers who have mortgages. In other words, the Fed may have to be less aggressive than it would like to be. The U.S CB Consumer Confidence report will be released today, and on Friday of this week, key inflation numbers via the Hourly Average Earnings will be published along with employment data. A lack of clarity is not good for Forex traders. The decline in the NZD/USD has been strong and the near-term trend could be cautious.
Traders hoping for a Strong Reversal Upwards should Remain Conservative While traders who have bullish feelings may want to believe the NZD/USD is oversold, the trend downwards demonstrates nervousness remains strong.
Wagering on upside price action may feel correct, but it should not be done with targets that are too high. Perhaps the NZD/USD will bounce off of the current long-term lows being tested, but wagering against the prevailing trend in the near term could prove to be dangerous . The NZD/USD may remain cautious and continue to make support look vulnerable until a change of sentiment creeps into Forex and the broad markets, and when a more positive outlook will arrive remains a mystery.NZD/USD Short-Term Outlook: Current resistance : 0.60375 Current Support: 0.60220 High Target: 0.60610 Low Target: 0.60060Ready to trade our forex daily analysis and predictions ? Check out the most trusted forex brokers nz worth using.
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