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NZD/USD retreats from fresh weekly highs

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 22, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - NZD/USD reverses a part of yesterday’s sharp rally on the back of a minor correction, although holds above 0.65 handle.

    NZD/USD recovery fails below 20-DMA at 0.6582

    Currently, the NZD/USD pair trades -0.07% lower at 0.6525, retreating from fresh one-week highs posted at 0.6563 in opening trades. The Kiwi halted its sharp rebound from four-month lows below 20-DMA and now drifts lower as markets resorted to profit-taking after the bird retraced almost a third of the 2016 fall so far.

    The NZD/USD pair benefited from a major turnaround in the risk conditions witnessed during the American session after the oil prices staged a solid comeback along with the stocks, with the sentiment lifted on the more ECB stimulus expectations. Meanwhile, the Kiwi is seen consolidating the upside this Friday, finding support from the extension of the risk-on trades into Asia.

    Looking ahead, the oil price action and the sentiment on the stocks will continue to dominate the moves in the pair, while a set of US data will be also closely watched.

    NZD/USD Levels to consider


    To the upside, the next resistance is located at 0.6582 (20-DMA), above which it could extend gains to 0.6600/01 (round number/ daily R1) levels. To the downside immediate support might be located at 0.6500 (round number) and from there to 0.6481/79 (1h 20-SMA/ 10-DMA).
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