- NZD/USD slipped below the 0.7200 level on Wednesday weighed by a stronger US dollar.
- However, technical factors assisted NZD/USD in recovering from lows in the 0.7150s.
NZD/USD slipped below the 0.7200 level during Wednesday trade, weighed at the time by strength in the US dollar in wake of a string of strong US data activity and inflation data releases. However, the Dollar Index (DXY), though ending Wednesday’s session higher, was unable to convincingly break above the 91.00 level. Thus, USD major pairs have been granted some respite and NZD/USD has been able to rally back from Wednesday session lows in the 0.7150s to trade in the 0.7190s at the start of the Thursday Asia Pacific session.
Technical factors were also in play in aiding NZD/USD recovery from Wednesday’s session lows. NZD/USD found support at an uptrend linking the 21 December 2020 and 28 January lows around the 0.7160 mark, an area also coinciding with the pair’s 21-day moving average at 0.7166. Should the US dollar bulls regain control and this level go, NZD/USD may well target the next area of significant support, which is the 18 and 27 January lows around the 0.7100 mark.
Looking ahead, amid a lack of any important New Zealand economic events on Thursday, the pair is likely to remain focused on USD flows. US Import and Export Price data for January, released at 13:30GMT on Thursday will be scrutinised for further signs of inflation. January Housing data (Building Permits and Housing Starts), Weekly Jobless Claims numbers and February’s Philadelphia Fed Manufacturing survey report will all also be released at 13:30GMT, thus the US dollar could be choppy around this time.
NZD/USD four hour chart
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