The NZD / USD pair has returned all initial gains from the Asian session and is moving back below the 0.7200 level. At time of writing, the pair is trading in the region of daily lows, around the 0.7195 level, having peaked at 0.7225 earlier in the day.
The daily chart shows that the bulls are struggling to achieve a convincing breakout of a triangle pattern, represented by trend lines connecting the highs on Jan 6 and 26 and the lows on Jan 18 and 28.
A daily close above the triangle resistance, currently at 0.7217, would confirm the breakout and open the doors for a retest of 0.7315 (Jan 6 high).
That seems likely, as New Zealand’s strong labor market, pointing to a V-shaped economic recovery, has reduced the likelihood of further monetary easing by the Reserve Bank of New Zealand.
That said, the NZD is still vulnerable to potential risk aversion. A move below 0.71 would confirm a breakout of the triangle and create a bearish reversal pattern.
NZD / USD daily chart
NZD / USD technical levels
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