NZD/USD: Violent Selloff and Intriguing Support Build Allure – 08 February 2023
Traders outside of New Zealand should also note that this Monday, the 6th of February, a national holiday was celebrated in the nation, meaning domestic financial houses were not operating.
The NZD/USD is trading near important support after a steep selloff on Friday and early this week, perhaps making the currency pair an interesting speculative wager now.
Speculators who like to wager using contrarian perceptions may find the NZD/USD rather attractive in the near term. The NZD/USD is trading near the 0.63350 ratios as of this writing. Late last week the NZD/USD mirrored many major currency pairs and exhibited a strong downturn against the USD. This occurred when stronger-than-expected job numbers from the U.S. created a nervous reaction in behavioral sentiment.
Reversal Lower may be ready to react with Speculative Buying in the NZD/USD
On Thursday of last week the NZD/USD was trading near the 0.65400 ratio, the last time the currency pair had traversed that high was in the first week of June 2022. However after the U.S Non-Farm Employment Change statistics caused massive strength in the USD, the NZD/USD suddenly found itself within a steep selling mode.
Traders outside of New Zealand should also note that this Monday, the 6th of February, a national holiday was celebrated in the nation, meaning domestic financial houses were not operating. This fact essentially may have set the table for selling to remain strong on Monday from outside of New Zealand, but also cause the NZD/USD to falter again yesterday. Meaning that while other major currencies reacted with some upside Tuesday after the large selloff across Forex because of the strong USD on Friday and Monday, the NZD/USD has not enjoyed a solid reversal higher as a reaction to the selling which may have been overdone as of yet.
Speculators may Find Opportunities in the NZD/USD on the Bullish Side
Day traders who enjoy wagering on the NZD/USD should keep their eyes on the 0.63400 level in the short term. This level may prove to be a magnet for speculative long bets by large traders of the NZD/USD. If support levels prove durable near the 0.63300 ratios, this may spark some buying based on the notion that selling off the NZD/USD has been overdone while considering the rather strong bullish trend the NZD/USD had enjoyed up until late last week.
The NZD/USD moves fast and its price velocity can be dangerous for day traders who use too much leverage.Traders looking for upside reversals should not be overly ambitious and be willing to use narrow take-profit targets to cash in profits if they develop.
The near term is likely to produce choppy conditions in the NZD/USD and traders need to use solid risk-taking tactics if they want to wager on upside momentum developing, meaning stop losses are urged. From a risk-reward scenario, a move higher in the NZD/USD technically may look like a contrarian attitude by some traders, but if current support holds this could be an intriguing buying signal for a potential climb.
NZD/USD Short-Term Outlook:
Current Resistance: 0.63425
Current Support: 0.63250
High Target: 0.63990
Low Target: 0.62750