NZD/USD breaks higher to test 0.6940 on New Zealand budget
|- Jumps nearly 30-pips on New Zealand’s budget release.
- Weaker DXY and risk-on boosting the sentiment around Kiwi.
- Awaits US datasets for fresh trading signals.
The NZD/USD pair broke its overnight consolidative phase to the upside and jumped sharply beyond the 0.69 handle, as the bulls received fresh impetus from optimistic New Zealand’s budget release, which revealed that the NZ government boosted spending, forecasts debt reduction.
The bounce in the spot can be partially attributed to the ongoing weakness in the US dollar across its main competitors, as yesterday’s mixed US housing and industrial figures continue to weigh negatively while markets also cheers better-than-expected NZ PPI data amid a better sentiment towards risk assets, as the rally in Treasury yields loses momentum.
Later today, the pair will take cues from the broad market sentiment and USD dynamics, as attention turns towards the US Philly Fed manufacturing index and jobless claims for near-term trading opportunities.
NZD/USD Technical Levels
Ross Burland, Analyst at FXStreet, notes, “Support comes in at 0.6850 and resistance at 0.6950 and 0.7080. The NZD/USD remains below the key 200-month moving average support at 0.6980. Technicals are bearish with RSIs that are biased to the downside longer-term on the weekly sticks. Below 0.6850, 0.6780 comes as next downside target meeting the lows of mid-Nov 2017.”
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