NZD/USD: Convincing move above 0.70 remains elusive

• Despite Wednesday’s big bullish outside-day candle, a convincing move above 0.70 remains elusive.
• Weak New Zealand data is likely weighing over the NZD today.

The NZD/USD pair created a bullish outside-day candle, signaling a short-term bullish trend reversal.

Still, the NZD bulls are having a tough time absorbing supplies above the 0.70 mark. For instance, the currency has faded the spike to 0.7020 seen earlier today and currently trades flat lined just below the psychological level of 0.70.

The decline from 0.70 to 0.7020 could be associated with dismal New Zealand data releases and bearish set up in short duration charts.

New Zealand’s terms of trade fell 1.9 percent in the March quarter, largely due to softer dairy prices (top export). Export prices fell 2.2 percent, while imports edged down 0.3 percent, Statistics New Zealand said.

The ANZ-Roy Morgan consumer confidence index rose to 121.0 after dropping 7.5 points to 120.5 in the previous month but failed to put a strong bid under the New Zealand dollar.

Meanwhile, the hourly chart shows a bearish price-relative strength index, hence a pullback from 0.7020 to 0.6998 does not come as a surprise and could be extended further if the US non-farm payrolls number and wage growth figure blows past expectations.

NZD/USD Technical Levels

The short-term outlook remains bullish as long as the pair holds above 0.6882 (bullish outside-day candle low).

The resistance is lined up at 0.7024 (previous day’s high), 0.7053 (May 4 high), and 0.7059 (38.2 % Fib R of Apr-May sell-off), while support is seen at 0.6974 (May 22 high), 0.6966 (5-day MA), and 0.6946 (10-day MA).