- The NZD USD pair is up 0.27% amid positive risk appetite.
- The Omicron variant, although highly transmissible, seems mild on a case-by-case basis so far.
- NZD / USD Price Forecast: Tipped higher in the short term, but downside risks persist.
After hitting a new low for the year on Monday, the NZD / USD it is making a comeback in the American session on Tuesday, trading around 0.6772 at the time of writing. Market sentiment is bullish, as shown by the global equity markets, which are turning a profit. Although the newly discovered omicron variant is more contagious than other strains, COVID-19 patients with that variant have only shown mild symptoms. There is news and rumors that there is an antibody treatment created by Glaxo and it works on the Omicron variant, as reported by studies.
In the overnight session, the NZD / USD fell to a new year low at 0.6735, then rallied towards the 100 hourly SMA, dynamic resistance that halted the bullish move triggered by the weakness of the US dollar. In the past hours, the greenback picked up some demand, pushing the pair towards the 50 SMA at 0.6754 to stabilize at current levels.
An absent economic agenda in New Zealand and the US left the NZD / USD relying on the dynamics of market sentiment, the USD and news from China.
NZD / USD Price Forecast: Technical Outlook
On the 1-hour chart, the NZD / USD pair is trading higher in the short term, but downside risks remain. The 100 SMA at 0.6782, which converges around the R3 daily pivot level, could halt any bullish movement, as was done previously three times throughout the day. That, coupled with the 50 SMA at 0.6754, could keep the pair trading sideways due to the lack of a catalyst other than pure market sentiment.
In the event that it breaks above the 100 hourly SMA, the first resistance line would be the 200 hourly SMA at 0.6805. A breakout of that level would expose the December 2 high of 0.6830.
On the other hand, a break below the 50-hour SMA would expose the year-to-date low at 0.6736, followed by the figure at 0.6700.