- The NZD/USD is trading near the 0.61340 level as of this writing which is a short-term high.
- The NZD/USD touched the 0.61090 level early this morning and yesterday a low of nearly 0.61050 was seen.
- Before speculators rush into buying positions of the NZD/USD they should acknowledge the price range of the currency pair has been rather narrow since the 17th of January.
Volatility which hasn’t been as robust as it normally is within the NZD/USD however may reappear later today. The U.S Federal Reserve will be making its FOMC Statement. While the Fed is not expected to change its monetary policy tonight, speculators of the NZD/USD and other major Forex pairs would like to hear are clues regarding the U.S central banks outlook in the mid-term regarding interest rates. A late spring rate cut has become the mantra among financial institutions.
NZD/USD and the Potential of No New News
Before speculators of the NZD/USD jump into positions wagering on direction of the currency pair before the Fed’s announcement today, they should note there is a distinct possibility the U.S central bank will offer only a limited change regarding its last FOMC Statement which occurred on the 13th of December.
The potential exist that the Fed could deliver a message that creates momentary volatility and then a return to what has become the norm the past two weeks, meaning a price range in which financial institutions believe fair market value has been found. Traders looking to wager on support levels producing reversals higher today may be proven correct, but resistance levels technically could also create movements lower. In other words expect choppiness, because the outlook of the U.S Federal Reserve is likely not going to offer many new clues.
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Financial Houses seem to be Cautious and Speculators Should Be Too
The rather tight range in the NZD/USD will certainly widen later today as the Fed gets ready to make its pronouncements. Traders should be cautious because if surprising rhetoric does get announced financial institutions could produce a rather violent night of trading.
- The price range of the NZD/USD should be expected to get wider and support near the 0.61055 should be watched.
- Resistance has proven rather durable near the 0.61500 mark over the past two and a half weeks, while this is a higher number than the current technical support level, if trading becomes fast later today it would not be surprising to see this ratio get tested again.
NZD/USD Short Term Outlook:
Current Resistance: 0.61440
Current Support: 0.61210
High Target: 0.61595
Low Target: 0.61030
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