Short-Term Forex Technical Outlook: NZD/USD

The New Zealand dollar surged higher against the greenback this week as the Reserve Bank of New Zealand held the benchmark interest rate steady at the record-low of 2.50%, and long-term expectations for higher interest rates may lead the pair higher over the near-term as the central bank holds an improved outlook for future growth.

[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 against the greenback this week as the Reserve Bank of New Zealand held the benchmark interest rate steady at the record-low of 2.50%, and long-term expectations for higher interest rates may lead the pair higher over the near-term as the central bank holds an improved outlook for future growth. After reaching a high of 0.0.7220 in August, the NZD/USD fell to a low of 0.4894 in March as investors curbed their appetite for high-yielding assets however, the rebound in market sentiment paired with the improved outlook held by the RBNZ may continue to drive the exchange rate higher as investors expect the central bank to tighten policy over the next 12 months. As a result, we could see the kiwi-dollar make an attempt to test the trend highs over the next few hours of trading, but as the RSI approaches overbought territory, gains are likely to be capped, and we may see fall lower to fill-in the gap from the 120 SMA at 0.6301. At the same time, the rise in global equities paired with higher commodity prices is likely to support demands for higher risk/reward investments, and the pair may trend higher over the session as risk trends continue to dictate price action in the currency market. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.

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