NZD/USD surges in response to new RBNZ Governor
The New Zealand Dollar was trading below a massive resistance area formed by the 100– and 200-hour SMAs, the weekly and monthly PPs circa 0.6865.
This strong level, however, was breached in the wake of announcing Adrian Orr as the next Governor of the Reserve Bank of New Zealand. The impact of this fundamental event was a 39 pip surge within one hour after the news, as well as a continuous increase in price even several hours later.
This up-move sent technical indicators near historic highs, suggesting that the most probable subsequent move for the pair could be a fall.
The nearest support is the weekly R1 at 0.6894. It is likewise possible that bears do not stop at this area and pushes the Kiwi lower, thus setting the 0.6865 mark as a session low.
This strong level, however, was breached in the wake of announcing Adrian Orr as the next Governor of the Reserve Bank of New Zealand. The impact of this fundamental event was a 39 pip surge within one hour after the news, as well as a continuous increase in price even several hours later.
This up-move sent technical indicators near historic highs, suggesting that the most probable subsequent move for the pair could be a fall.
The nearest support is the weekly R1 at 0.6894. It is likewise possible that bears do not stop at this area and pushes the Kiwi lower, thus setting the 0.6865 mark as a session low.
Comment:
The New Zealand Dollar has been a long time trading in a narrow channel up pattern against the US Dollar. However that is about to change.
The currency pair is approaching the upper trend line of a dominant channel up pattern near the 0.7060 mark. Most likely that resistance will be reached in the upcoming sessions.
However, during Thursday’s trading the pair was in a retreat after reaching the resistance of the mentioned narrow pattern. The retreat is likely going to be stopped by the combined support of the weekly R3 and the lower trend line of the junior channel.
The currency pair is approaching the upper trend line of a dominant channel up pattern near the 0.7060 mark. Most likely that resistance will be reached in the upcoming sessions.
However, during Thursday’s trading the pair was in a retreat after reaching the resistance of the mentioned narrow pattern. The retreat is likely going to be stopped by the combined support of the weekly R3 and the lower trend line of the junior channel.
The New Zealand Dollar has been appreciating gradually against the US Dollar during the past two trading sessions.
As apparent on the chart, the pair was struggling to move past the weekly R2 at 0.6953 two times. This was done mid-session when the rate surged 39 pips in the wake of the US CPI data release, thus resulting in a test of the upper channel boundary circa 0.6980.
Given that the weekly R3 is also located nearby, the given area might mark a reversal.
Technical indicators suggest that the pair might continue trading in the aforementioned channel. Thus, the rate should try to approach the 55-hour SMA or even lower down to the 100– and 200-hour SMAs circa 0.6890.
Meanwhile, the Federal Reserve is set to release various fundamentals today at 1900GMT and 1930GMT.