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NZD/USD Rate Outlook Mired by Failure to Test Monthly High

NZD/USD Rate Outlook Mired by Failure to Test Monthly High

David Song, Strategist

NZD/USD trades back above the 50-Day SMA (0.6271) as it attempts to retrace the decline following the US Non-Farm Payrolls (NFP) report, but the exchange rate may continue to track the negative slope in the moving average as it appears to be reversing ahead of the monthly high (0.6353).

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In turn, NZD/USD may push back below the moving average as it struggles to extends the advance from the start of the week, and the recovery from the yearly low (0.6325) may turn out to be a correction in the broader trend if the exchange rate fails to defend the monthly low (0.6212).

NZD/USD Rate Daily Chart

Image of NZD/USD rate daily chart

Source: Trading View

NZD/USD trades in a narrow range following the failed attempt to close above 0.6350 (100% expansion), but the exchange rate may continue to track the negative slope in the 50-Day SMA (0.6271) as it seems to be reversing ahead of the monthly high (0.6353).

Lack of momentum to hold above the moving average may push NZD/USD back towards the 0.6230 (61.8% retracement) to 0.6260 (38.2% expansion) area, with a break of the monthly low (0.6212) bringing the 0.6170 (50% expansion) region back on the radar.

Next area of interest comes in around 0.6070 (61.8% expansion), with a break of the yearly low (0.6061) opening up the Fibonacci overlap around 0.5900 (78.6% retracement) to 0.5930 (78.6% expansion).

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--- 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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