The New Zealand surged to a fresh yearly high of 0.6598 earlier this week, but failed to hold its ground on the back of U.S. dollar strength, and the NZD/USD may continue to push higher over the near-term as market participants raise their appetite for higher risk/reward investments.
Currency Pair: NZD/USD
Chart: 60 Min Charts
Short-Term Bias: Flat
Analysis
The New Zealand surged to a fresh yearly high of 0.6598 earlier this week, but failed to hold its ground on the back of U.S. dollar strength, and the NZD/USD may continue to push higher over the near-term as market participants raise their appetite for higher risk/reward investments. In addition, a Bloomberg News survey shows that 6 of the 10 economists polled are now forecasting the Reserve Bank of New Zealand to hold the official cash rate at 2.50% next week, and long-term expectations for higher interest rates may continue to drive the kiwi higher as investors weigh the outlook for future policy. After reaching a high of 0.0.7220 in August, the kiwi-dollar slipped to a low of 0.4894 in March due to a rise in risk aversion however, the recent turn around in market sentiment continues to drive the exchange rate higher, and the pair may continue to retrace the sell-off from the previous year as risk trends continue to drive price action in the currency market. Over the next few hours of trading, we may see the NZD/USD attempt to push back above the 120 SMA and retrace the sell-off from earlier this week however, as U.S. Non-Farm payrolls are expected to show 520K drop in employment, fears of a protracted downturn in the global economy may hold the pair within a tight range over the remainder of the session. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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