Technical Bias: Bullish
Key Takeaways:
- NZDUSD faces tough resistance near key horizontal level
- Technical bias remains bullish
- US durable goods data is due today
The New Zealand Dollar (NZD) extended upside movement against the US Dollar on Wednesday, increasing the price of NZDUSD to more than 0.7660 following the worse than expected news releases about the Kiwi economy. The technical sentiment remains bullish due to a Higher High and Higher Low in the recent downside move.
Technical Analysis
As of this writing, the pair is being traded around 0.7637. A support can be seen near 0.7608-0.7617, the horizontal support area ahead of 0.7600, the psychological number and then 0.7534, the low of February 24 as demonstrated in the following chart.
On the upside, the pair is expected to face a hurdle near 0.7700, the psychological number ahead of 0.7889, the swing high of the last major upside move. The technical bias will remain bullish as long as the 0.7185 support area is intact.
New Zealand Trade Balance
The trade balance in New Zealand remained $50 million in February as compared to $33 million in the month before, missing the average forecast of $392 million. Generally speaking, higher NZ trade surplus is considered positive for the Kiwi economy and vice versa so the worse than expected actual outcome spurred selling pressure in the price of NZDUSD. Not to mention, US rate hike optimism is already keeping the US Dollar under consistent bullish momentum.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy in short to medium term. The trade should however be stopped out on a daily closing above the 0.7700 handle as described above.
Trade global forex with the best ECN broker of 2021*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about making your money go further with FXOpen.
* FXOpen International, best ECN broker of 2021, according to the IAFT
