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  • NZD/USD has dropped back from highs above 0.7100 in recent trade amid a bout of profit-taking.
  • NZD is an underperformer in the G10 on Thursday but is still one of the star performers over the last month.

A bout of profit-taking has pulled NZD/USD back from the 0.7100 level, which the pair briefly surpassed earlier on Thursday. At present, NZD/USD is trading closer to the 0.7080 and still trades with gains of around 10 pips on about 0.1% on the day.

NZD pulls back but still a star performer

Amid the latest bout of profit-taking, NZD has dropped down the G10 performance ranking and is the second-worst performer on the day (USD is, of course, the worst performer). However, when looking at how NZD has performed vs its peers over the last month, the picture is completely different; NZD is up 6.17% since 4 November, significantly outperforming the likes of AUD (up 4.0%), EUR (up 3.7%), GBP (up 3.1%), CHF (up 2.3%) and CAD (up 2.1%). Thus, some days of relative underperformance are likely warranted at this point.

NZD/USD still looking bullish from a technical perspective

NZD/USD continues to trade within the confines of a bullish trend channel, implying that in the near future, a continuation of recent upside represents the path of least resistance. To the upside, this bullish trend channel links the 16, 18 and 24 November and 2 and 3 December highs. To the downside, the bullish trend channel links the 13, 19, 23 and 30 November and 2 and 3 December lows.

If NZD/USD does see a temporary setback, solid support in the 0.7060 area (the June 2018 highs) is likely to come into play. Just below that, 0.7050 has acted as resistance and support recently also. Meanwhile, if the pair continues with its bullish trajectory, a test of March 2018 lows just above 0.7150 are likely at some point.

NZD/USD four hour chart

More key levels