NZ business confidence lifts off decade lows in September, triggers bull flag breakout in NZD/USD

New Zealand business confidence recovered from a decade low in September, though firms remained pessimistic overall.
The uptick in business confidence triggered a bull flag breakout in NZD/USD, opening doors for re-test of the recent high of 0.67.

Omkar Godbole FXStreet Contributor

The NZD/USD pair jumped 40 pips to a session high of 0.6688 after the New Zealand headline business confidence jumped 12 points to a four-month high of -38 in September.

Further, business activity outlook rose to 7.8 percent in September from the previous month's print of 3.8 percent.

The upbeat data triggered a bull flag breakout on the 4-hour chart, indicating a resumption of the rally from the Sept. 16 low of 0.6539. Still, the pair may have a tough time extending gains above 0.67 (Sept. 21 high) on account of caution ahead of the Fed rate decision.

The US central bank is set to raise rates by 25 basis points (bps) today and could signal low tolerance for an above-target inflation.

At press time, the NZD/USD pair is trading at 0.6675.

NZD/USD Technical Levels

Resistance: 0.67 (Sept. 21 high), 0.6727 (Aug. 28 high), 0.6779 (100-day moving average)

Support: 0.6664 (50-day moving average), 0.6634 (session low), 0.66 (psychological level)

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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