NZD/USD Signal 03/02:New Zealand Dollar Looks Vulnerable

(MENAFN- Daily Forex) The 0.60 level is being tested, and it is a large round psychologically significant figure that mattered quite a bit multiple times in the past. This is an area that we are going to have to pay closer attention to/USD

The New Zealand dollar gapped lower to kick off the trading session on Monday, turned around to show signs of life, and then rolled over quite significantly. The 0.60 level is being tested, and it is a large round psychologically significant figure that mattered quite a bit multiple times in the past. If we were to break down from here, that could continue US dollar strength in a market that quite frankly is overbought Policy and Economic Data

Keep in mind that the Federal Reserve Chairman nominee Kevin Warsh is a bit more practical when it comes to cutting rates than the markets had bet on. We are also seeing manufacturing PMI numbers on Monday jumping above the 52 level, which was a bit of a surprise.

In other words, the Federal Reserve is going to be dealing with an economy that just won't roll over. If that's going to be the case, it's likely that the US dollar will be oversold not only here but in multiple other places. New Zealand on the other hand is likely to cut rates sometime this year and that of course is a bit of an outlier for the region as Australia is likely to cut rates.

All things being equal, this is a market that I think continues to see a lot of choppy behavior, but I still believe that the New Zealand dollar remains fairly weak over the longer term. I do think it's probably only a matter of time before we drop as we are in a major area of resistance.

Potential signal: Selling below the 0.60 level makes sense, with a stop at 0.61, and a target of 0.58

Ready to trade our daily Forex analysis? Here's a list of the brokers for forex trading in New Zealand to choose from.

MENAFN03022026000131011023ID1110690594