(MENAFN- Daily Forex)

• The New Zealand dollar is stalling at the 50-day EMA within a broader downtrend, with traders favoring shorts below 0.58.
• Trade tensions and global growth concerns continue to pressure the currency ahead of the upcoming Fed decision.

The New Zealand dollar has gone back and forth during the trading session here on Tuesday as we are stalling near the 50-day EMA. With that being the case, I think it's worth noting that the US dollar seems to be fighting back against a multitude of currencies. And while the New Zealand dollar has had one of the bigger jumps as of late, the reality is we are still very much in a downtrend. And I think that continues to be the case. It's very interesting that we are stalling right where we are, as the 50-day EMA is so widely followed. I don't have any interest in buying the New Zealand dollar until we can break above the 0.58 level. So, until then, I look at this as a short-only type of pair.

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If we break down below the 0.57 level, then the market could drop down to the 0.56 level. A lot of this is going to come down to how growth is seen around the world. And right now, there are a lot of trade tensions out there that will continue to make some of these commodity currencies struggle a bit. Although there are certain commodities such as gold and silver that are absolutely on fire, but New Zealand isn't exactly a gold exporter of note. So as long as that's the case, I think you have a situation where you're fading rallies, and we are starting to see people try to make a decision here. Below 0.57, I become very interested in being short. Above 0.58, then I have to think about the other direction.

EURUSD Chart by TradingView

But with the Federal Reserve interest rate decision next Wednesday, it's going to be difficult to break out to the upside without some type of confirmation of dovish behavior out of DC.

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