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NZD/USD Rate Rebounds from 200-Day SMA to Eye Yearly High

NZD/USD Rate Rebounds from 200-Day SMA to Eye Yearly High

David Song, Strategist

NZD/USD retraces the decline following the US Non-Farm Payrolls (NFP) report as it bounces back from the 200-Day SMA (0.6908), and the exchange rate may attempt to test the yearly high (0.6998) as long as it holds above the moving average.

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It seems as though the commodity bloc currencies will continue to benefit from the recovery in risk appetite as the Australian Dollar climbs to a fresh yearly high, and NZD/USD may exhibit similar behavior as the 50-Day SMA (0.6772) establishes a positive slope.

NZD/USD Rate Daily Chart

Image of NZD/USD rate daily chart

Source: Trading View

NZD/USD may continue to exhibit a bullish trend after clearing the opening range for 2022 in March, with a break/close above the Fibonacci overlap around 0.6940 (50% expansion) to 0.6990 (23.6% retracement) bringing the 0.7070 (61.8% expansion) to 0.7110 (38.2% expansion) area on the radaras it bounces along channel resistance.

A break above the October high (0.7219) opens up the 0.7260 (78.6% expansion) region, but lack of momentum to clear the overlap around 0.6940 (50% expansion) to 0.6990 (23.6% retracement) may push NZD/USD back towards the 0.6870 (50% retracement) region as it lines up with channel support.

However, failure to hold above the 0.6870 (50% retracement) region would largely negate the ascending channel, with a break/close below the 0.6770 (23.6% expansion) to 0.6810 (38.2% expansion) area bringing the March low (0.6729) on the radar.

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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