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The New Zealand dollar traded lower against the US dollar earlier during this week, but it recently managed to find buyers and jumped higher. It also breached an important resistance area, which might call for more gains in the pair moving ahead. The New Zealand trade balance data was released earlier during the Asian session by the Statistics New Zealand. The data was not according to the market’s expectation, but somehow encouraged the New Zealand dollar buyers, as the NZDUSD pair traded higher during the Asian session.
There was a critical bearish trend line formed on the hourly chart of the NZDUSD pair, which was broken recently. This break has opened the doors for more gains in the pair in the short term. The pair has even settled above the 76.4% Fibonacci retracement level of the last drop from the 0.7945 high to 0.7765 low. However, there is a possibility that the pair might correct a bit lower from the current levels and retest the broken resistance area. In that situation, the pair is likely to gain bids, as the 200 hourly moving average is also sitting just below the mentioned trend line. The hourly RSI is around the extreme levels raising the case of a short-term minor correction in the NZDUSD pair.
On the upside, initial resistance is around the last swing high of 0.7945. However, if the pair continues to trade higher, then it might challenge the 0.8000 level again.
Overall, one might consider buying dips around the broken trend line as long as the pair is trading above the 200 MA.
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Posted By IKOFX Technical Team: Online Forex Broker
Website – http://ikofx.com
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