NZD/USD: Eruption Higher Followed By A Pull Back For Traders
Date
11/16/2023 2:27:11 PM
(MENAFN- Daily Forex) Bullish speculators who have been anticipating a sustained reversal upwards in the NZD/USD got rewarded on Tuesday and partially into yesterday's trading sessions. The NZD/USD jumped from a low of nearly 0.58550 to the 0.60550 ratio during this one-day timespan. Unfortunately for bullish traders who did not cash out winning positions, the NZD/USD has fallen backward a bit and is now around the 0.59850 level with its typical fast action being demonstrated.
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Inflation numbers from the U.S. showed improvement in the past two days and this has created the notion the Federal Reserve may actually be done hiking the Federal Funds Rate. However, traders who were expecting a one-way ride to the moon were hit by the turn lower which lasted into early today, when the NZD/USD touched the 0.59720 mark. Yet, experienced traders who use solid risk management likely have not been surprised by the rather polite incremental decline after yesterday's highs, which challenged the value last seen on the 11th of October/USD may now Battle for Momentum Higher that is Sustainable
Reversals in Forex are commonplace. Traders who are looking for trajectories only in one direction and are short-term specialists are in the wrong profession if they are not prepared for the give-and-take aspects of speculation. Solid trading tactics always need to be used.
The NZD/USD has the capability to create sustained moves, but technically when any chart is looked upon, the currency pair – like all others – has a rapid pace of changing values which alternate between up and down gyrations. The move lower in the NZD/USD since yesterday may only prove to be a temporary pushback for the currency pair as financial institutions position their holdings based on new outlooks.
The Remainder of the Week will be Dominated by Behavioral Sentiment
Big economic news from the U.S. will be relatively light the remainder of the week, yes, the weekly Unemployment Claims will be released today, along with the Philly Fed Manufacturing report, but investors got their big dose of data the past two days. Now the NZD/USD will move based on risk appetite within the marketplace if in fact it continues to show its teeth and traders will have to interpret trends carefully. The NZD/USD is now trading in the upper boundaries of its one-month chart.
Traders who want to pursue additional moves higher in the NZD/USD cannot be blamed; they should not get overly ambitious however and be willing to cash out winning positions if they develop. Risk-averse headwind threats potentially still lurk for the financial markets. Support levels should be looked at as a way to ignite buying positions in the NZD/USD, if a trader thinks a pullback will ultimately begin to reverse upwards again.
NZD/USD Short Term Outlook:
Current Resistance: 0.59980
Current Support: 0.59775
High Target: 0.60680
Low Target: 0.59610
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