Questions will certainly be asked next week upon the return of financial institutions, about if the NZD/USD has been bought too aggressively.
Holiday trading volumes are certainly in effect for the NZD/USD and speculators will have to remain careful today and tomorrow. While the bullish trend of the NZD/USD which has dominated the currency pair since late October remains alluring, traders must remain alert for the potential of sudden reversals lower that could complicate short-term thinking. The NZD/USD is currently near 0.63350.
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Yes, the climb higher in the NZD/USD is attractive, but trading volumes the remainder of this week will be thin and can cause rather choppy results. The ability of the NZD/USD to sustain its trajectory higher and remain steady the past couple of days is noteworthy, but after touching a high of nearly 0.63700 early today, the currency pair has drifted lower. However, risk appetite in the global markets remains rather strong and the reversal lower could prove to be momentary.
Conservative speculators may want to participate in the NZD/USD in the short term, but they have to understand many financial institutions will remain on the sidelines until the middle of next week. This means that trading results may be compelling, but betting blindly on the potential of additional strength in the NZD/USD is not wise. The ability to climb towards the 0.63700 mark this morning is significant and ambitious speculators are likely dreaming about the 0.64000 level, which is a ratio that was last seen on the 14th of July but only momentarily.
Questions will certainly be asked next week upon the return of financial institutions, about if the NZD/USD has been bought too aggressively. Support levels today and tomorrow will prove intriguing, particularly with light trading taking place. If the 0.63300 remains a ratio that is within sight, this may be taken as a bullish sign for things to come.
However, more impetus for higher moves in the NZD/USD is unlikely to appear this week. For the moment, optimistic behavioral sentiment is good and a steady price may be welcomed, but assuming another leg up before the New Year’s holiday may be asking for too much.
- Patience will be needed by traders who insist on participating with the NZD/USD today and tomorrow.
- Solid risk management will be important to protect against surprising volatility which could develop suddenly. Quick hitting targets should be considered by NZD/USD short-term traders.
Current Resistance: 0.63410
Current Support: 0.63290
High Target: 0.63625
Low Target: 0.63205
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