NZD / USD pulls back from 0.7100 as Kiwi bulls take a breather

• NZD / USD has pulled back from highs above 0.7100 in recent trading amid profit taking.
• NZD underperforms in the G10 on Thursday but remains one of the stars for the past month.

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

NZD backs off but still a star

Amid the latest profit-taking, the NZD has slipped down the G10 performance rankings and is the second worst performer of the day (the USD is, of course, the worst performer). However, when you look at NZD’s performance compared to its peers over the past month, the picture is completely different; The NZD has risen 6.17% since November 4, significantly outperforming AUD (4.0% more), EUR (3.7% more), GBP (3.1% more), CHF (2.3% more) and CAD (2.1% more). So a few days of relatively lower performance are likely to be warranted at this point.

NZD / USD continues to look bullish from a technical perspective

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

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

4 hour chart