The NZD/USD reached levels on Tuesday not seen since November 2023, signaling a growing bearish sentiment in the market. Forex traders often abide by the saying “you do not fight the trend” and “you do not fight the Fed”, as these principles have proven to be harsh realities for speculators. The NZD/USD is currently hovering near the 0.59225 level, showing typical fluctuations.
The downward momentum in the NZD/USD over the mid-term is undeniable, with the currency pair touching a low of nearly 0.58600 on Tuesday. Fed Chairman Powell’s recent shift in rhetoric regarding U.S. interest rates has added to the selling pressure, solidifying the expectation of a stronger USD in transactions.
The NZD/USD’s value has struggled to stay above the 0.59000 level, with hopes of maintaining value above 0.60000 diminishing. New Zealand’s inflation data, showing stronger than anticipated Consumer Price Index statistics, has also put a hold on expectations of an interest rate cut within the nation.
The lower realms of the NZD/USD have been developing steadily, with Monday’s drop below the 0.59500 level likely becoming a focal point for traders. While some believe the currency pair has been oversold, bearish traders may look to challenge the 0.59500 resistance. The upcoming release of U.S. weekly Unemployment Claims is not expected to significantly impact the NZD/USD.
In the short-term, the NZD/USD is likely to remain within its lower realms, providing technical traders with opportunities for quick moves lower. Traders should be cautious not to be overly ambitious, with the 0.58950 mark potentially serving as a key support level for further declines.
Short Term Outlook for NZD/USD:
– Current Resistance: 0.59350
– Current Support: 0.59190
– High Target: 0.59440
– Low Target: 0.58990
Overall, the NZD/USD is facing bearish pressure as sentiment solidifies, with traders closely monitoring key levels for potential opportunities.