Move High loses power as support becomes vulnerable
After trading near highs at the start of the week not seen since the third week of June, the NZD/USD currency pair has started to look technically bearish again.
The NZD/USD mirrors the results seen across many forex spheres over the past two days of trading; suddenly the USD strengthened again. As of this writing, NZD/USD is trading near 0.62900, which is actually close to interesting resistance above.
If the 0.63000 mark is challenged and holds higher value, this could be seen by some technical traders as a sign that further buying action may ensue.. However, traders may want to stay realistic about their upside targets and keep their ambitions rooted with strong risk management, including profit taking that cashes in on gains before the potential downturn follows.
USD/NZD may have additional territory to explore on the short-term downside
At 2n/a In August, NZD/USD was trading slightly higher than today, and the 0.63000 level started to become technical resistance. Before that on Monday 1st August NZD/USD was crossing near the 0.63540 ratio before losing ground, the last time these highs were seen was on the 21stst of June. However, before traders are convinced that the long-term downtrend in NZD/USD is about to fade completely, they need to understand that the global economic climate remains challenging. The sudden drop in NZD/USD could prove to be durable in the short term.
NZD/USD Upward Move Has Lost Power and Resistance Begins to Bloom
If the value of NZD/USD stays below the 0.63000 level for an extended duration today and heads into tomorrow with tests of support levels, it could stimulate further bearish momentum. Traders hoping for upside reversals should be prepared to look for quick positions.
From a short-term risk-reward scenario in NZD/USD, there appears to be reason to suspect nervous sentiment is strengthening again, and a risk of increased selling pressure may emerge.. Traders could get nervous as US Federal Reserve officials were quick to stress this week that they believe more interest rate hikes are needed, not just one more in September.
Technically, if the 0.62790 mark starts to weaken, additional selling could develop which could create a quick test of yesterday’s ratios near 0.62600 to 0.62500 to expose.. Traders should expect some volatility for the NZD/USD over the next couple of trading days as financial institutions continue to seek equilibrium in rather hazy Forex conditions, which are sure to cause conditions restless.
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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