Traders who are confused and searching for magical economic formulas and other secret potions as to why the NZD/USD has risen rapidly the past day and a half either have their heads in the sand or are stubborn about perspectives that are their own. The NZD/USD has jumped higher simply on the fact that risk appetite has increased in the global markets and USD centric weakness has been fueled. The NZD/USD is back above the 0.58300 mark rather comfortably.
Sentiment shifts have caused many major currencies to gain against the USD, and the New Zealand Dollar is not excluded. This is not rocket science. Technical traders may now be able to point to where the NZD/USD is traversing around 0.58350 and say it is touching values last seen on the 24th of March, but what else can they really say about the currency pair? The ride upwards created the past two days blew by vulnerable resistance levels fueled by better short-term outlooks, it is that simple.
Will Optimism Prevail for the NZD/USD?
The big question is how long optimism will hold for the NZD/USD? Has it already run into headwinds as caution comes into the Forex equation and financial institutions worry about the Iranian ceasefire declared by the U.S White House? The NZD/USD might have gained rapidly the past day and a half, but in the short-term it is starting to look like moving higher once again has some large hurdles to jump.
While the NZD/USD is touching marks a little over two weeks ago, it is still below heights that were above the 0.60000 level before the Iranian war started. The ability to march higher has to be questioned by day traders, and outside barometers like the price of WTI Crude Oil should be looked as a gauge regarding near-term outlooks. Again, it must be stressed this isn’t about the NZD/USD stepping into some economic formula that is being practiced by financial institutions, it is about sentiment and the amount of risk appetite large players have regarding outlook short-term.
Near-Term Whims and Worries for the NZD/USD
The NZD/USD has done well the past two days. Day traders need to use entry orders to engage with the currency pair to make sure they get legitimate fills.
Spreads are wide because fear still exists in the broad markets regarding potential pratfalls.
Going into the weekend the NZD/USD may find some headwinds simply based on cautious bets being made by those worried about what could unfold on Saturday and Sunday in the Middle East.
Speculators who are bold can bet on their perspectives, will optimism continue over the weekend, or will things sour?
NZD/USD Short Term Outlook:
Current Resistance: 0.58370
Current Support: 0.57320
High Target: 0.58450
Low Target: 0.57960