New Zealand Dollar Technical Outlook: Upward Momentum Intact
NZD/USD, NEW ZEALAND DOLLAR - Technical Outlook:
- New Zealand Dollar’s uptrend is in place.
- NZD/USD’s uptrend has accelerated most recently.
- What is the outlook and the key levels to watch?
NZD/USD SHORT-TERM TECHNICAL FORECAST – NEUTRAL
The month-long uptrend of the New Zealand Dollar has accelerated against the US Dollar since last week and there is no sign of reversal yet.
NZD/USD has maintained a choppy, but steady higher-top-higher-bottom pattern since mid-October. While the earlier part of the recovery could be classified as “two-steps-forward-one-step-back”, gains have been more pronounced and seemingly achieved with greater conviction since last week. Straight-line moves typically signify greater directional confidence, while choppiness is associated with indecision (see 240-minute chart). Notably, NZD/USD has broken some key resistance levels in the process, as the chart shows.
NZD/USD 240-minutes Chart
Given that upward momentum is intact, the pair could test the 200-day moving average (now at about 0.6315), coinciding with a minor downtrend line from June –a possibility highlighted in the previous update. This resistance area may be tough to crack, at least on the first attempt – corrective rebounds at the end of 2021 and early 2022 were capped by the long-term moving average. So, some sort of consolidation or retreat around there wouldn’t be surprising. Most immediately, NZD/USD needs to grapple with a hurdle at the mid-September high of 0.6160.
NZD/USD Daily Chart
Whether any pullback is deep enough to derail the nascent uptrend remains to be seen. In this regard, immediate/minor support is at Monday’s low of 0.6060 followed by the 8 November high of 0.6000. The uptrend is unlikely to be at risk while it holds above the 89-day moving average. As the chart above shows, the resistance-turned-support has cushioned pullbacks since the rally began in October.
--- Written by Manish Jaradi, Strategist for DailyFX.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.