The NZD/USD is near the 0.57740 ratio as of this writing with the currency pair showing an ability to sustain higher ground the past few days and suggest financial institutions may have shifted sentiment.
 

The NZD/USD which was testing the 0.55800 level on the 21st of November is now touching ratios near the 0.57740 as of this morning. The currency pair has shown an ability to climb from important lows and is correlating to the broader Forex market which has seen signs of USD centric weakness creep into the mindset of financial institutions.

A simple look at a week and one month charts will certainly show a bullish perspective, but this has come on the heels of a difficult battle lower. Day traders who have been anticipating an upwards recovery may be feeling better, but they should still remain cautious. However, recent price action in the NZD/USD the past few days has produced a durable move higher that has made resistance levels appear vulnerable.
 

Deep Breaths and Patience as Federal Reserve Awaits

Upon being able to sustain price momentum above the 0.57000 realm last Friday and then demonstrate penetration of the 0.57250 mark on Tuesday and more buying price action yesterday, the NZD/USD this morning has kept pace. Again, risk management is essential in the currency pair because volatility is part of the New Zealand Dollar’s character. Day traders who have made winning wagers may want to cash in some of the their profits, and consider caution the coming few days for the NZD/USD as risk events loom.

Tomorrow the U.S will issue its PCE Price Index inflation gauge which the Federal Reserve is known to use as an important reading via its FOMC decision making process. And the U.S Fed happens to be waiting in the wings and will make a Federal Funds Rate pronouncement next Wednesday. It appears financial institutions globally have been speculating that the Fed will cut their interest rate by 25 basis points on the 10th of December.
 

Setting Table for Volatility and Reversals

Experienced speculators of the NZD/USD know that reversals are part of the wagering game in the currency pair. Now that solid gains have been made for over a week’s time it might be time to wonder if and when financial institutions will think they might have gotten too far ahead of their outlooks and ambitions.

• Yes, the NZD/USD definitely has room to run higher and over the mid-term just may prove to be a rather solid bullish bet.
• However, today and tomorrow leading into the weekend may be choppy as positions are judged and the potential of caution is considered.
• Sustained higher moves above the 0.57850 may spark additional buyers in the NZD/USD who believe the 0.58000 (which was last hit in late October) is a legitimate target.
• Below, the 0.57650 to 0.57550 levels appear to be where the currency pair could traverse if volatility and caution whipsaw the currency pair near-term.
   

NZD/USD Short Term Outlook:

Current Resistance: 0.57770

Current Support: 0.57710

High Target: 0.57875

Low Target: 0.57550

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