New Zealand Dollar (NZD/USD) Price Outlook:
- NZD/USD surged to resistance on the back of renewed US Dollar weakness on Monday
- Despite the rally higher, the pair may have its work cut out for it with the 200-day moving average overhead
- Learn the different trading styles to see what type of price action best suits you
New Zealand Dollar Forecast: NZD/USD Runs into Resistance, Will it Hold?
The New Zealand Dollar extended its rally to start the week as US Dollar weakness persisted across the board. As a result, NZD/USD is approaching horizontal resistance and the 200-day moving average near 0.6314. With a largely constructive technical backdrop, can NZD/USD press above the barrier, or will bears mount a push lower?
NZD/USD Price Chart: Daily Time Frame (October 2018 – June 2020)
To be sure, the New Zealand Dollar has enjoyed a remarkable performance against the US Dollar in the last few months as it continues to recover from the initial shock of the coronavirus pandemic. Now with the 200-day simple moving average in view, bulls may face their next significant test. If the pair can establish a daily close above the level, it would be an encouraging development for the pair from a technical perspective – supplementing the series of higher-highs and higher-lows that have already been posted.
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However, RSI reveals NZD/USD is teetering on the brink of overbought territory and the 200-day moving average is one of the more widely watched levels on any price chart, so further gains may become difficult. Thus, there may be some bearish opportunities in the shorter-term that are attractive from a risk-reward perspective.
NZD/USD Price Chart: 4 – Hour Time Frame (March 2020 – June 2020)
Either way, it is my opinion that recent price action may suggest NZD/USD is headed higher in the weeks to come should the fundamental landscape remain consistent. In the meantime, shorter-term retracements are not out of the question and would allow for consolidation that may be constructive for a renewed run higher.
As price action develops, follow @PeterHanksFX on Twitter for updates.
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of clients are net long.
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–Written by Peter Hanks, Analyst for DailyFX.com
Contact and follow Peter on Twitter @PeterHanksFX