- NZD/USD is currently trading at 0.6714 around its closing level after a better bid day in risk-on markets.
- On a technical basis, the pair still has some upside to go before RSI is overbought.
NZD/USD recovered European losses on Wednesday in the NY session and score ground back onto the 0.67 handle with a high of 0.6716 from a low of 0.6684. Risk-sentiment remained elevated with equities biased higher although EMs were under pressure. The Kiwi was also anchored by the Aussie which was unable to get off from the floor after a sell-off from 0.7360 in late London on Tuesday. Fundamentally, the case for the Kiwi to continue its recovery is slim, what with the greenback likely to remain a solid investment with the carry and its safe-haven staus.
Choppy trading conditions
“The kiwi chopped about within a tight range overnight, with much of the focus elsewhere. Today’s business confidence figures will certainly be watched, but they will need to show quite a different picture (better or worse) to alter the NZD landscape right here,” analysts at ANZ explained.
NZD/USD levels
The weekly 10 SMA is still the first key target – located at 0.6735 and if broken, it will be the first time the price has traded above it since mid-April earlier this year. Also, a break of the 10-W SMA opens up the possibility of that 2018 downside trend is correcting with the Bollinger band serving its purpose on the downside. The 21-D SMA already gave out and the 10-D SMA is en route to meet and cross up through the descending 21-D SMA as the price heads towards the 50-D SMA and towards the upper end of the Bollinger band with daily RSI still with room to go until overbought readings kick in. To the downside, however, support is located at 0.6630, while otherwise, the bull’s target in the medium term should be the 200-month moving average resistance at 0.7019.
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