Speculators likely to suffer losses

Admittedly, it is tempting to think that the pair has been oversold, but the reality is that the currency pair has already explored these depths.

NZD/USD continues to show a downtrend and is crossing lows close to significant. At the time of writing, NZD/USD is trading slightly above the 0.61000 relationship, but readers should compare this written price with the Forex market to get an idea of ​​the ever-moving prices. . .

However, NZD/USD trend still down. While pullbacks will no doubt be triggered on the upside, NZD/USD is in sight of lows not seen since peaking at depths of 0.60550 on July 14th. Upward moves may not be able to generate aggressive momentum.

NZD/USD may feel oversold, but these depths have been shown before

Speculators who remain focused on the bullish momentum they may want to reconsider their perceptions; one of your first tasks may be to ensure that you have eliminated any bias you may have towards the New Zealand dollar. Indeed, it is tempting to think that the NZD/USD value has been oversold, but the reality is that the currency pair has already explored these depths. Not only did NZD/USD trade decline in July this year, but at the height of coronavirus fears, it saw a relationship of 0.58000 to 0.60000 from March to May 2020.

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The temptation to say this time is different may be wrong when it comes to NZD/USD

Although the currency traders they can say that the depths that NZD/USD reached during the coronavirus are completely different from current trading terms, they might be wrong. Global economic conditions remain subdued and potential price increases interest rate by the Federal Reserve of the United States added to the strength of the dollar. It may have been fashionable to skeptically believe that the US central bank would reverse its hawkish interest rate policy in mid-August, when NZD/USD peaked near 0.64700, but that high of value seems very elusive at the moment:

  • ANZ statistics on business confidence in New Zealand were negative yesterday. Tomorrow there will be important employment data from the US which will affect the NZD/USD.
  • Watch for support near the 0.61000 level; if this relationship weakens and the value stays below, it could trigger a bearish sentiment Additional.

The NZD/USD trend remains down. While it can be tempting to look for quick shock reversals to the upside, the more valid short-term bet might be to continue chasing lower price targets. The risk management is certainly necessary, and traders should use entry price orders to ensure that their executions meet expectations. If the support near 0.61000 is broken lower, traders cannot be blamed for setting targets near the lows already posted today.

Short term forecast for NZD/USD:

  • Current resistance: 0.61170
  • Current support: 0.60910
  • High target: 0.61250
  • Low target: 0.60400

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USD/NZD Technical Analysis

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