Talking Points:
- NZD/USD having problem cracking resistance at 0.7120
- Further upside conviction might need to see a break above resistance at 0.7250
- 2.25% Official Cash Rate might be keeping the Kiwi bid, key intra-day levels here
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The NZD/USD is trading higher after the FOMC rate decision, but the pair seems to be having trouble breaking long term resistance at 0.7120 at the time of writing.
The pair has seen a bounce higher after finding support at a zone below the 0.7000 handle following sharp decline last week.
At this stage, the NZD/USD might need to see further strength to move above the 0.7120 resistance, which could indicate another attempt to make new highs. A break above may expose what could be a key resistance area below the 0.7250 level, which coincides with the 0.38 Fib of the downtrend starting from July 2014.
A hold below the 0.7120 level might imply that the latest push higher is corrective and could put the focus again on the 0.7000 figure for possible support. A move below the 0.70 figure will change the current market “structure” and might have eyes on 0.69 and 0.67 for potential support.
Meanwhile, the DailyFX Speculative Sentiment Index (SSI) is showing that about 46.4% of traders are long the NZD/USD at the time of writing. The SSI is mainly used as a contrarian indicator, implying a slight long bias.
You can find more info about the DailyFX SSI indicator here.
NZD/USD Daily Chart: July 28, 2016
--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com
To contact Oded Shimoni, e-mail oshimoni@dailyfx.com
Follow him on Twitter at @OdedShimoni
