Short-Term Forex Technical Outlook: NZD/USD

The New Zealand dollar continued to strengthen against its major counterparts, and rose to a fresh trend high against the greenback this week, and the high-yielding currency may continue to push higher over the near-term as market sentiment improves.

[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 continued to strengthen against its major counterparts, and rose to a fresh trend high against the greenback this week, and the high-yielding currency may continue to push higher over the near-term as market sentiment improves. At the same time, expectations for a rate cut by the Reserve Bank of New Zealand paired with fears of a deepening downturn in the global economy is likely to weigh on the exchange rate in the month ahead, and we may see the pair retrace the three-month advance from March as the outlook for growth and inflation remains bleak. After reaching a high of 0.6954 in September, the NZD/USD slipped to a low of 0.4894 in March due to a rise in risk aversion however, the recent recovery in market sentiment continues to lead the exchange rate higher, and we may see pair continue to retrace the sell-off from the previous year as market participants move into higher risk/reward investments. Over the next few hours of trading, we may see the kiwi-dollar continue to push higher as global equities advance however, as the RSI approaches overbought territory, gains are likely to be capped, and we may see the pair fall lower to fill-in the gap from the 120 SMA before moving higher. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.

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