NZD/USD Forecast: 0.57 Support Holds As USD Pressure Builds

(MENAFN- Daily Forex) The NZD/USD pair continues to consolidate at the moment, as we are testing a major support area. The market is also paying close attention to the difference between central banks.

NZD/USD

The New Zealand dollar has been very noisy against the U.S. dollar during the trading session here on Monday as we continue to test the crucial 0.57 level. The 0.57 level has been important a couple of times, as the market has been a noisy affair lately. Recently, though, we have seen this market fall apart as the Reserve Bank of New Zealand has been very dovish, while the Federal Reserve has recently shocked the market with its hawkish behavior and the fact that it looks like more rate hikes could be coming.

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With inflation in the United States seemingly going nowhere, and with the energy inflation situation, the Fed will remain somewhat tight. At the same time, in New Zealand, you have a lot of concerns about the knock-on effect of the Asian economies, what energy could do there, and what it could do to New Zealand being said, we are sitting at a pretty significant support level

As long as we can stay above there, there might be the possibility of a bit of a bounce. That bounce, more likely than not, will be temporary. I would anticipate that the 0.58 level will be resistance, right along with the 50-day EMA.

EURUSD Chart by TradingView

We're at the bottom of a larger range, so that is something to be cognizant of, and that could, of course, keep a scenario where we simply play the range. But something would have to change either in Wellington or Washington, D.C., for me to have any real faith in any rally at this point. In short, rallies are going to be sold into by myself.

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