NZD/USD Technical Analysis: Waiting for Reserve Bank of New Zealand’s Decision. In the past three months, the NZD/USD pair has been on a strong upward trend. As shown below, the pair has had a strong 30 degrees trend, making slight higher highs and higher lows. The pair has moved from a low of 0.6781 to a high of 0.7439.
The upward trend has been because of the dollar weakness and the strong performance of commodities. As you know, New Zealand is the world’s leader in milk and cattle exports. It is also a richly endowed country with major natural resources. As shown below, in the past one month, the dollar index has fallen from a high of $92.62 to a low of $88.43.
The upward trajectory changed last Friday when the dollar started to rise following the release of the monthly jobs numbers. After the news, the treasury yields rose to the highest level in three years, forcing investors to exit stocks. At the end of the day, the dollar was up by almost a percent.
This week, the movements on the pair will depend on the RBNZ, which will release its monetary policy decision on Wednesday. On this day, traders will want to hear their opinion about the economy and interest rates.
This week, in case of a reversal, traders should watch out for the 0.7250 level and in case the pair continues to move down, they should watch out for the 0.7251 level as shown below.