The New Zealand Dollar (NZD) fell against the US Dollar (USD) on Wednesday, dragging the price of NZDUSD to less than even 0.7700 following the release of some key economic reports. The technical bias remains bullish because of Higher High and Higher Low on daily chart.
As of this writing, the pair is being traded near 0.7692. A hurdle may be noted around 0.7700, the psychological number ahead of 0.7738, the high of the bullish engulfing candle which emerged yesterday. The technical bias will remain bullish as long as the 0.7535 support area is intact.
On the downside, the pair is expected to find a support around 0.7616, the 61.8% fib level ahead of 0.7535, the low of the last major dip as demonstrated in the above daily chart. A reversal from the current level could incite renewed selling pressure, validating a move towards the 0.7500 handle.
New Zealand Trade Balance
The trade deficit of New Zealand narrowed down to $-2.41 billion in March as compared to $2.13 billion in the same month of the year before, a government report revealed today. Generally speaking, lower trade deficit is considered positive for the economy and vice versa. Today’s data exceeded the expectations of analysts thus spurring bullish momentum in the price of NZDUSD. The pair has however entered into overbought region thus posing for a bearish reversal
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 0.7736 resistance area.