NZD/USD Facing the 100 Daily SMA, As Commodity Dollars Surge
NZD/USD was bearish until October last year, but the bearish reversal in the USD as the FED slowed down on the rhetoric, sent this forex pair higher. Although, since early February when the price climbed to 0.6540s, NZD/USD has been making lower highs and lower lows, which is not a good sign for the buyers.
Although, looking at the daily chart we can see that this pair experienced a strong rally last week as risk sentiment improved, reaching a high of 0.6247. The next resistance level comes at around 0.6370-80, which was the high in April and May. If buyers push the price above that level, then the streak of lower highs will be broken and the bullish momentum might continue.
On Wednesday last week, we saw a retreat lower, after the quarterly GDP report. The Q1 GDP figure was in line with expectations, showing a contraction of -0.1%, which was a slight improvement compared to the previously revised figure of -0.7% (originally reported as -0.6%). It’s worth noting that previous quarters also underwent downward revisions.
On an annual basis, the GDP growth rate until the end of March was 2.2%, falling short of the anticipated 2.6% and remaining the same as the previously reported figure of 2.2%. So, the GDP report revealed some downward revisions and a lower-than-expected annual growth rate, leading to the retreat in the value of the New Zealand Dollar. But, that retreat was short lived and the NZD recuperated well, helped by better sentiment and a very strong AUD.
Although before the resistance zone higher up in NZD/USD , above the current price, we have the 100 daily SMA (green) which has been acting as support and resistance before on the daily chart. Buyers stopped the push on Friday after they reached this moving average which shows that there is selling pressure there. Besides that, the daily candlestick closed as a doji which is a bearish reversing signal so let’s see whether this pair keeps the bullish momentum from last week or reversed down and turns bearish from here.
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