Key Highlights
- The New Zealand Dollar moved nicely recently and traded above 0.6950-80 resistance against the US Dollar.
- There is a short-term breakout pattern forming with support at 0.6980 on the 4-hours chart of NZD/USD.
- A break above 0.7030 is required for buyers to step up the bullish momentum.
- The ANZ Business Confidence in January 2018 increased to -37.8 from -39.3.
NZDUSD Technical Analysis
The past couple of weeks were positive for the New Zealand Dollar as it moved above 0.7000 against the US Dollar. However, the main question is whether NZD/USD can retain traction above 0.6980 and 0.7000 or not.
Looking at the 4-hour chart, the pair started a solid upside move from the 0.6820 swing low. It broke many resistances on the way up such as 0.6880, 0.6950 and 0.6980. More importantly, the pair moved above 0.7000, and is currently placed well above the 200 simple moving average (green, 4-hour) and the 100 SMA (red, 4-hour).
The pair was able to move above the 1.236 Fib extension of the last decline from the 0.6945 high to 0.6816 low.
The upside was strong enough for a push above 0.7000. The pair recently formed a high at 0.7033. It seems like the pair is struggling to break the 1.618 Fib extension of the last decline from the 0.6945 high to 0.6816 low.
At the outset, there is a short-term breakout pattern forming with support at 0.6980 on the same chart. On the upside, the breakout resistance is at 0.7030. Should there be a close above 0.7030, the pair could surge toward 0.7100.
On the flip side, a downside break below the 0.6980 support may open the doors for a correction. In the mentioned scenario, NZD/USD could retest the 0.6950 support zone.
Fundamentally, there is no major event lined up today in the US except November’s Building Permits and Housing Starts figures. The market is looking for a decline and if that’s the case, NZD/USD might continue to move higher.
