After trading near highs early this week not seen since the third week of June, the NZD/USD currency pair has started to look technically bearish again.
The NZD/USD is mirroring results seen in many Forex spheres the past two days of trading; suddenly the USD has gotten stronger again. As of this writing the NZD/USD is trading near 0.62900, which is actually close to interesting resistance up above.
If the 0.63000 mark gets challenged and sustains value above, this could be taken as a sign by some technical traders that additional buying action may ensue. However, traders may want to remain realistic regarding their upwards targets and keep their ambitions rooted with solid risk management, including take profits that cash out winnings before the potential of downturns following.
USD/NZD may have additional territory to Explore Downwards in the Near Term
On the 2nd of August the NZD/USD was trading fractionally higher compared to today, and the 0.63000 level started to become resistance technically. Prior to this on Monday the 1st of August the NZD/USD was traversing near the 0.63540 ratio before losing ground, the last time those highs were seen was on the 21st of June. However, before traders become convinced the long term bearish trend of the NZD/USD is about to vanish completely, they should understand the global economic climate remains challenging. The sudden downturn of the NZD/USD may prove durable in the near term.
The Move Higher in the NZD/USD has lost Power and Resistance is beginning to Flourish
If the value of the NZD/USD remains under the 0.63000 level for a sustained amount of time today and head’s into tomorrow with tests of support levels, this could spur on further downside momentum. Traders hoping for reversals upwards should be willing to look for quick hitting positions.
From a risk reward scenario near term in the NZD/USD, there appears to be reasons to suspect nervous sentiment is again building, and a risk of more selling pressure could emerge. Traders may become nervous as ‘chirping’ from U.S Federal Reserve officials have been quick to point out this week they believe more interest rate hikes are needed, not only one more in September.
Technically if the 0.62790 mark begins to falter, additional selling may build which could create a quick test of yesterday’s ratios near the 0.62600 to 0.62500 to be exhibited. Traders should expect some volatility for the NZD/USD the next two days of trading as financial houses continue to search for equilibrium in rather unclear Forex conditions fundamentally, which are bound to cause choppy conditions.
NZD/USD Short Term Outlook
Current Resistance: 0.62998
Current Support: 0.62790
High Target: 0.63185
Low Target: 0.61940
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