Talking Points:
- NZD/USD having problems at a key resistance zone above 0.7200
- Further upside conviction might need to see a break above 0.7250
- Kiwi was the second best performing currency against the US Dollar last week
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The NZD/USD surged higher following Friday’s US GDP figures miss, and was the second best performing currency versus the US Dollar last week (besides the Yen).
The pair has seen a bounce higher after finding support at a zone below the 0.7000 handle and managed to clear interim resistance at 0.7120.
At the moment, the NZD/USD is trading at what appears to be a key resistance area between the 0.72 handle (which coincides with the 0.38 Fib of the downtrend starting from July 2014) and 0.7250.
A hold below that zone might put the focus on 0.7120 for possible support, followed by the 0.7000 figure.
A break above the zone could convey strong bullish intentions which seems likely to put eyes on the last swing high at the 0.73247 level, that coincides with possible channel trend line resistance.
Meanwhile, the DailyFX Speculative Sentiment Index (SSI) is showing that about 36.7% of traders are long the NZD/USD at the time of writing. The SSI is mainly used as a contrarian indicator, implying possible strength ahead.
You can find more info about the DailyFX SSI indicator here.
NZD/USD Daily Chart: August 1, 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
