
NZD/USD Remains Really Bullish, Heading Towards the 200 Daily SMA
[[NZD/USD]] turned quite bullish in October as the USD turned bearish, due to the increasing weakness in the US manufacturing, as the ISM manufacturing report showed that month. The sentiment also improved last month, after comments regarding Phase One deal.
As a result, risk assets climbed higher and the Kiwi was on the forefront of this. AUD/USD has retreated lower during November, but the Kiwi has held up pretty well, despite the USD buyers returning again last month. This shows that the situation surrounding the NZD has improved.
So, if something can’t go down, it will eventually go up. NZD/USD didn’t decline last month; it traded mostly sideways. This week/month, the USD turned bearish again and we see that NZD/USD is leading the way up once again. This pair has climbed more than 100 pips in the last two days, breaking above the 100 SMA (green) on the daily chart.
The 100 SMA provided resistance early last month and reversed the price down, but the 50 SMA (yellow) turned into solid support, holding twice during pullbacks lower and turning the price bullish again. the 100 SMA was providing resistance during last week, but yesterday we saw a jump higher, which came after the US ISM manufacturing report showed yet another deterioration.
That brought up more questions regarding the US economy and the USD turned bearish again. So now, NZD/USD looks pretty bullish and the next target will be the 200 SMA (red). We might play a short sell trade from there, trying to catch some pips after the first rejection, but we will have to get a reversing signal first, so we will follow the price action closely when it gets there.