The New Zealand Dollar (NZD) extended upside movement against the US Dollar (USD) on Monday, increasing the price of NZDUSD to more than 0.6830 during the thin-trading Asian session. The technical bias remains bullish because of a Higher Low (HL) in the recent downside move.
As of this writing, the pair is being traded around 0.6836. A hurdle may be noted near 0.6896-0.6900, the confluence of last major upside rally as well as psychological number as demonstrated in the following daily chart. A break above the 0.6900 resistance area could incite renewed buying interest, validating a move towards the 0.6970 resistance area.
On the downside, the pair is likely to find a support around 0.6782, the 38.2% fib level ahead of 0.6556, the 23.6% fib level and then 0.6500, the psychological number. The technical bias will remain bullish as long as the 0.6426 support area is intact.
Despite the Fed hike, the Kiwi dollar managed a bid from 0.6680 supporting territory post the FOMC meeting while the greenback softened into the pre-Xmas closing sessions.
Commodities are the driver at the moment rather than the Central Banks divergence theme for the time being with oil bouncing back in a short squeeze of over 4% last week, and coupled with a positive new Zealand trade balance the upside remains favored as we head towards the close of 2015 this week.
Considering the overall technical and fundamental outlook, buying the pair around current levels appears to be a good strategy in short to medium term.
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