NZD/USD snapped the opening range for March after failing to push above the 200-Day SMA (0.6913), but the exchange rate may stage another attempt to push above the moving average as it continues to trade within the ascending channel from earlier this year.
NZD/USD appears to be bouncing back from channel support even as the Federal Reserve delivers a 25bp rate hike, and the exchange rate may continue to retrace the decline from the monthly high (0.6926) as the smaller-than-expected rebound in New Zealand’s Gross Domestic Product (GDP) does little to derail the rebound from the monthly low (0.6729).
It remains to be seen if the 3.1% per annum rise in New Zealand GDP will influence the Reserve Bank of New Zealand (RBNZ) as the economy was expected to expand 3.3% during the last three-months of 2021, but NZD/USD may stage further attempts to push above the 200-Day SMA 0.6913) as it continues to trade within the ascending channel from earlier this year.
NZD/USD Rate Daily Chart
Source: Trading View
NZD/USD continues to hold above the 50-Day SMA (0.6727) as it bounces back from channel support, with the exchange rate climbing back above the Fibonacci overlap around 0.6770 (23.6% expansion) to 0.6810 (38.2% expansion) as it initiates a series of higher highs and lows from the monthly low (0.6729).
Need a break/close above the 0.6870 (50% retracement) region to bring the 200-Day SMA (0.6913) back on the radar, with a move above the moving average opening the 0.6940 (50% expansion) to 0.6990 (23.6% retracement) region.
However, failure to hold above the 50-Day SMA (0.6727) would negate the upward trending channel, with a break/close below the 0.6690 (38.2% expansion) to 0.6710 (61.8% expansion) region opening up the 0.6630 (50% expansion) to 0.6640 (23.6% expansion) area.
--- Written by David Song, Currency Strategist
Follow me on Twitter at @DavidJSong
