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Move beyond 50% Fibo. sets the stage for further gains

19 October 2021

NZD/USD gained strong traction for the fifth consecutive session on Tuesday. Sustained break through the 0.7100 confluence hurdle favours bullish traders. Overbought conditions warrant some caution before placing fresh bullish bets. The NZD/USD pair continued scaling higher through the early European session and shot to over one-month tops, around the 0.7145-50 region in the last hour. The safe-haven US dollar witnessed aggressive selling on Tuesday and sank to three-week lows amid the dominant risk-on flow. This, in turn, provided a strong boost to the perceived riskier kiwi and assisted the NZD/USD pair to gain strong follow-through traction for the fifth successive day.

The momentum confirmed a bullish breakout through the 0.7100 confluence, comprising the very important 200-day SMA and a descending trend-line extending from YTD tops touched in February. A subsequent move beyond the 50% Fibonacci level of the 0.7466-0.6805 downfall has set the stage for further gains.

Meanwhile, technical indicators on hourly charts are already flashing overbought conditions. Moreover, RSI on the daily chart has moved on the verge of breaking into the overstretched territory, warranting some consolidation or a modest pullback before the next leg up for the NZD/USD pair.

From current levels, September monthly swing highs, around the 0.7170 region, seems to act as immediate resistance. A sustained move beyond has the potential to push the NZD/USD pair towards the 0.7200 round-figure mark en-route the 61.8% Fibo. level, around the 0.7215-20 area.

On the flip side, any meaningful retracement slide could attract some dip-buying near the 0.7100 confluence hurdle breakpoint. This, in turn, should help limit the downside near the 0.7070-60 region, which coincides with the 38.2% Fibo. level and act as a strong base for the NZD/USD pair.




NZD/USD reclaims the 0.6800 figure amid a mixed market mood
NZD/USD reclaims the 0.6800 figure amid a mixed market mood

The risk-sensitive NZD advances on a mixed-market mood. US Treasury yields rise, though falter of dragging the greenback, which heads south of the 96.00 threshold...

30 Dec 2021

NZD/USD looks weaker below 0.6800 mark
NZD/USD looks weaker below 0.6800 mark

A combination of factors failed to assist NZD/USD to capitalize on its early modest uptick. The cautious market mood capped the perceived riskier kiwi amid a subdued...

10 Dec 2021

Scope for dips towards the 0.6793-0.6776 confluence zone
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A dovish Reserve Bank of New Zealand (RBNZ) policy outcome this week, accompanied by a bloated NZD long positioning sees the kiwi breaking under a protracted...

25 Nov 2021

NZD/USD struggles for direction, flat-lined above mid-0.7100s
NZD/USD struggles for direction, flat-lined above mid-0.7100s

The NZD/USD pair seesawed between tepid gains/minor losses through the early part of the European session and was last seen trading in the neutral territory...

9 Nov 2021

NZD: Buy the Rumor sell the fact?
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The RBNZ confirmed a 25-basis-point rate raise, which had been widely anticipated and already factored into the markets. The NZD, however, did not benefit from the boost...

14 Oct 2021

NZD/USD pares intraday gains, up little around 0.6915-20 area
NZD/USD pares intraday gains, up little around 0.6915-20 area

The risk-on impulse provided a modest boost to the perceived riskier kiwi on Thursday. Hawkish Fed expectations acted as a tailwind for the USD and capped gains for the pair...

7 Oct 2021

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