NZD/USD bounces off lows near 0.7170; Trump's rhetoric could recharge US dollar
|Currently, NZD/USD is trading at 0.7197, up +0.19% or 14-pips on the day, having posted a daily high at 0.7210 and low at 0.7173.
The New Zealand dollar vs. American dollar has been on the downward spiral due to a dovish policy statement where the RBNZ failed to impress market participants as the central bank explained how it expects to hike rates sometime in 2019. The Kiwi experienced an immediate 80-pips sell-off on the comments.
On the other hand, the US economic docket had the Michigan Consumer Sentiment Index which printed 95.7 'a worse than expected' result, lower from consensus and previous. Furthermore, dollar bulls used Trump's latest 'phenomenal taxes' rhetoric to get back on the horse and drag lower Kiwi traders as the exchange rate traded below 0.7200 psychological level.
If Trump delivers further tax cuts or investment remarks during the press conference with Japan's PM Abe, the US dollar could recharge its battery and consolidate to move to new highs.
Historical data available for traders and investors indicates during the last 6-weeks that NZD/USD pair had the best trading day at +1.60% (Jan.17) or 115-pips, and the worst at -1.26% (Jan.18) or 89-pips.
Technical levels to watch
In terms of technical levels, upside barriers are aligned at 0.7240 (horizontal resistance), then at 0.7348 (high Jan.31) and above that at 0.7402 (high Nov. 8). While supports are aligned at 0.7157 (low Jan.23), later at 0.7110 (50-DMA) and below that at 0.7035 (low Nov.28). On the other hand, Stochastic Oscillator (5,3,3) seems to shift from the oversold territory. Therefore, there is evidence to expect further kiwi gains in the near term.
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