Short-Term Forex Technical Outlook: NZD/USD

[B]Currency Pair:[/B] NZD/USD
[B]Chart:[/B] 60 Min Charts
[B]Short-Term Bias:[/B] Flat


The New Zealand dollar surged to a fresh yearly high this week, and was the best performing currency against the greenback, with the NZD/USD advancing nearly 4.9% from the previous week. After reaching a high of 0.6954 in September, the kiwi-dollar slipped to a low of 0.4894 in March as investors curbed their appetite for risk however, the recent recovery in market sentiment continues to lead the exchange rate higher, and we may see pair retrace the sell-off from the previous year over the near-term as market participants move into higher risk/reward investments. At the same time, prospects for further easing by the Reserve Bank of New Zealand are likely to weigh on the NZD/USD as economists forecast the central bank to lower the benchmark interest rate by another 25bp to 2.25% next month. Nevertheless, we may see the kiwi-dollar attempt to cross back above 0.6160-70 (61.8% Fib) as tip lower over the next few hours of trading to cover the gap from the 120-SMA commodity prices tip higher however, as the RSI approaches overbought territory, gains are likely to be capped, and we could see the pair slip lower to cover the gap from the 120 SMA. Meanwhile, as the economic calendar for the follow week is expected to reinforce a weakening outlook for growth and inflation in the region, deteriorating fundamentals could lead the NZD/USD to retrace the recent advance over the following week, and may fall back below the 120 moving average to test the 50.0% Fib for short-term support. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.

[I]To contact the author of this article, please email: <>[/I]
[B][I][I] Related Articles:[/I][/I][/B]

[B][I][I]Is The Carry Trade Recovering?[/I][/I][/B]

[I][B]US Dollar Forecast to Lose Further versus Euro, Japanese Yen[/B][/I]

[I][B]Risk Appetite and Carry Interest Stalled by Long-Term Concerns[/B][/I]

[I][B]Australian Dollar Reversal Evidence is Strong[/B][/I]