NZD/USD Analysis Today - 04/09: Bearish Forex Slide (Chart)
(MENAFN- Daily Forex) The NZD/USD has sparked lower trading the past few days as Forex has suddenly started to grow cautious about global market conditions and U.S federal Reserve outlook.
The bullish parade higher in the NZD/USD currency pair touched a price value of nearly 0.63030 on Thursday of last week. The last time this apex level had been touched was in early January of this year. However, since touching the illustrious 0.63000 ratio and beyond, bearish trading has started to emerge. The culprit for selling is not being caused by internal New Zealand economic issues.
Global traders have become cautious. Even as inflation numbers on Friday via the PCE Price Index from the U.S met expectations with a calm outcome, the USD started to show signs of strength. It must be remembered that on late Friday U.S financial institutions were starting to close for the long Labor Day weekend. Trading volumes this Monday stayed light as U.S commercial banks were on holiday. However, yesterday's trading did show more nervousness. Where is it coming from exactly?
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money U.S Federal Reserve Concerns and the NZD/USD
The NZD as of this writing is near the 0.61825 mark with fast trading being exhibited. However, yesterday's early selloff showed that global Forex traders and asset investors are growing nervous. What they are nervous about is a slowing U.S economy and a passive U.S Federal Reserve. U.S jobs numbers will be published this Friday and if the Non-Farm Employment Change statistics are weaker than anticipated the Fed will have a tough decision ahead.
Financial institutions would like to see the U.S Fed be more aggressive. The NZD/USD has certainly priced in rate cut of around 0.50% with a combined September and November Federal Rates decrease factored into the currency pair. However, if U.S data proves negative this Friday, it is likely going to trigger a reaction in the broad markets and NZD/USD. Yesterday's global selloff may have been a signal financial institutions want a 0.50% cut in September. And they may not get it, because the Fed has a history of being too passive – particularly over the past handful of years. Investors fear an economic slowdown in the S Sentiment in the Near-Term for the NZD/USD and Choppiness
It is likely the NZD/USD will remain choppy over the short and near-term. The next two days of trading will see plenty of positioning by financial institutions who will be bracing for the U.S jobs numbers. If the U.S jobs numbers are weak and the Fed doesn't say anything about the results late on Friday, this could spark volatility in the NZD/USD.
The broad Forex market appears nervous, although the USD is still within the weaker aspects of its mid-term range, traders will want a clearer outlook.
Until clarity is delivered by the Federal Reserve the NZD/USD may be choppy. The 0.62000 level as resistance will be an intriguing barometer today and tomorrow regarding risk and behavioral sentiment.
NZD/USD Short Term Outlook:
Current Resistance: 0.61880
Current Support: 0.61800
High Target: 0.62150
Low Target: 0.61710
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