The New Zealand dollar has rallied a bit on Thursday, as traders continue to focus on the speech coming out on Friday by Kevin Warsh of the Federal reserve.
NZD/USD
The New Zealand dollar has rallied just a touch during the trading session on Thursday as we continue to see the 0.5950 area offer a bit of support. Ultimately, the 0.60 level above there is resistance, and I think a lot of traders will have to watch this area for some type of stability or possibly even range.
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With that being the case, traders are likely to continue to see a lot of volatility and a lot of noisy, choppy trading. With this, I suspect that we will remain somewhat range-bound between now and the crucial speech by Kevin Warsh on Friday from Jackson Hole.
Jackson Hole Expectations and Breakout Levels
That could give us a bit of a heads-up as to how the Federal Reserve's next policy move will look and whether or not they will be hawkish or dovish. A lot of traders out there have bet on the idea of a dovish Federal Reserve, but quite frankly, there have been members, such as the governor of the Federal Reserve Bank of Cleveland, recently suggesting that a couple of rate hikes are still very much on the table.
I think ultimately we have to ask a lot of questions here. It is a currency pair that features the central banks both being potentially raising rates, although many people believe that the Federal Reserve could be done.
The next 24 hours or so could be crucial for this pair, so it'll be worth watching. If we were to break above the 0.60 level, at that point in time, I think you have a significant enough shift into a bullish behavior pattern that buyers will jump in.
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