NZD/USD has been quite volatile and bearish recently while residing above 0.6700 area with a daily close. NZD has been struggling to regain momentum over USD whereas US positive economic reports provided USD with support.
NZD has been quite impressive with the recent counter-move against USD but recently could not sustain the impulsiveness it had earlier when trading above 0.6700. December's New House Sales report was published with the sharpest decrease in the recent seven years. This undermined NZD in the pair. This week NZD was quite positive with the economic reports, but it did not quite help the currency to gain momentum. Today Business NZ Manufacturing Index report was published with an increase to 55.1 from the previous figure of 53.7, which helped the currency to establish certain bullish counter-move in the pair but it is expected to be short-lived. On the other hand, USD is likely to maintain momentum in the coming days. As NZD investors are currently waiting for the US-China efficient trade deal. If the deal is concluded, NZD is going to pick up steam in the hsort term after weakness.
On the other hand, USD has been quite optimistic and positive with the recent economic events and reports which helped the currency to sustain the bearish pressure in the pair. Citing FED's Quarles, inflation is very well contained and data on the domestic economy is also quite positive. Solid fundamentals are sure to prop up the economy in the medium term. After raising the interest rate 4 times last year, this year FED Chair Powell is going to take a patient approach with at least of 2 rate hikes which are currently being discussed. According to FED's official Charles Evans, a pause in rate hike is crucial amid looming uncertainty. Recently Philly FED Manufacturing Index report was published with a significant increase to 17.0 from the previous figure of 9.4 which was expected to be at 9.7 and Unemployment Claims report was published with a positive result of a decrease to 213k from the previous figure of 216k which was expected to increase to 219k.
Meantime, USD is expected to dominate NZD further in the coming days. Any soft economic report from the US will provide grounds the bullish momentum again in the future.
Now let us look at the technical view. The price is currently heading towards 0.6700 area after a breach below the dynamic level of 20 EMA. As of the current price structure, the price is expected to move lower towards 0.67. If any bearish rejection with a daily close is observed, certain bullish pressure towards 0.70 is expected in the future. As the price remains above 0.6700 area, the bullish bias is expected to continue.
SUPPORT: 0.6500, 0.6700
RESISTANCE: 0.6850, 0.6950, 0.70
The material has been provided by InstaForex Company - www.instaforex.com