The New Zealand dollar surged higher this week, and broke above the 200-Day SMA for the first time since May 2008, and we may see the NZD/USD continue to retrace the sell-off from October over the following week however, fundamental headwinds could drag on the exchange rate as the RBNZ continues to hold a dovish policy stance.
[B]Currency Pair:[/B] NZD/USD
[B]Chart:[/B] 60 Min Charts
[B]Short-Term Bias[/B]: Flat
[B][U]Analysis[/U][/B]
The New Zealand dollar surged higher this week, and broke above the 200-Day SMA for the first time since May 2008, and we may see the NZD/USD continue to retrace the sell-off from October over the following week however, fundamental headwinds could drag on the exchange rate as the RBNZ continues to hold a dovish policy stance. After reaching a high of 0.6349 in October, the kiwi-dollar slipped to a low of 0.4894 in March due to a surge in risk aversion, and as the OECD calls for the RBNZ to lower the cash rate to 2.00%, expectations for further easing paired with a weakening outlook for growth and inflation is likely to weigh on the pair over the near-term. Over the next few hours of trading, we may see the NZD/USD make another attempt to push above 0.6030-40 (78.6% Fib) however, as the RSI approaches overbought territory, we may see the pair fall lower to fill-in the gap from the 120 SMA. Nevertheless, as U.S. non-farm payrolls are scheduled for release later today, a dismal labor report could weigh on the markets, and we may see the kiwi-dollar lose ground following the release as the reserve currency continues to benefit from safe haven flows. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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