NZD/USD Nearing Stiff Resistance

NZD/USD Nearing Stiff Resistance

NZD/USD Nearing Stiff Resistance

The New Zealand dollar was one of the day’s best performing currencies. Stronger than expected consumer confidence, an uptick in migration and credit card spending along with the recent rebound in dairy prices helped extend the currency’s gains. In fact, upside surprises in NZ data has been a recent and consistent trend. The RBNZ has been pleased with the results and we believe that they are at the end of their easing cycle. We continue to expect the New Zealand dollar to outperform, particularly against non-dollar currencies.

NZD/USD is nearing stiff resistance. Between 0.6865 and 0.6900, there is the 200-day SMA, the October high and the 50% Fibonacci retracement of the 2009 to 2014 rally. If this level is broken (and we think it will be), there is no major resistance until 70 cents. However if it tests and rejects this level, then a retracement back to the 50-day SMA at 0.6660 is likely.

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