NZD / USD in range but looking to test recent highs of 0.7084

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  • The NZD / USD is trading flat on the day just above 0.7060, having oscillated between highs above 0.7080 and lows below 0.7040.
  • The pair continues to trade within an uptrend channel and the eyes of the bulls are pointing to new multi-year highs.

The NZD / USD It has been oscillating / in range on Wednesday, falling from Wednesday’s Asian session highs at 0.7084 to lows at 0.7030. In recent trading, however, the pair has rallied and recovered to around 0.7060. On the day, the NZD / USD is currently trading sideways.

Kiwi targets another streak at multi-year highs

In the Asian session on Wednesday, the NZD / USD it reached new multi-year highs below 0.7080. Kiwi bulls appear willing to maintain the bullish momentum. The NZD is poised to be one of the best-performing G10 currencies in 2020, or so the logic goes, given expectations of rising commodity prices and a shift toward better global trade and travel conditions as the world He is vaccinated against Covid-19 and Biden. administration normalized international trade relations.

However, Rabobank warns that the RBNZ moderation could be undervalued by markets today; RBNZ Governor Orr estimated that “without recent monetary policy actions … New Zealand’s trade-weighted exchange rate would have risen by around 7%,” which the bank sees as a clear indication of that the Central Bank of New Zealand “recognizes the importance of the exchange rate.” in achieving its inflation goals ”. The bank goes on to say that “the RBNZ has appeared in the past to use preventive policy actions to accentuate the impact of political decisions on the market and this year it has expressed its opinion on the threat of using negative interest rates.”

Markets seem to think that recent vaccine news undermines the risk of the RBNZ turning negative on interest rates in 2021. However, if the bank surprises in moderation in the coming months, this could take some of the wind out of stocks. sails of the RBNZ.

NZD / USD continues to respect the uptrend channel

The NZD / USD continues to move north within an uptrend channel that has been in play since early November; the uptrend line acting as resistance links the highs of November 11, 12, 24 and 30, while the uptrend line acting as support links the lows of November 13, 19, 23 and 30. In fact, this uptrend support was highly respected on Wednesday.

If the NZD / USD continues to rise within this trending channel, as appears to be the most likely course of action given that this represents the path of least resistance, the pair should be in for a cry of breaking to new multi-year highs for up 0.7084 soon. Gradually significant resistance is to the upside before the 0.7100 level, so this would be the next area to target and above that, the March 21, 2018 low at just over 0.7150.

To the downside, the most notable support area for the NZD / USD is again below 0.7000, the December 2018 high at 0.6970 and the Q1 2019 highs at 0.6940. Below that is the pair’s 21-day moving average, which has recently moved above 0.6900.

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