NZD/USD bulls hold the baton, for now

NZD/USD was moving higher midweek and reached 0.6273 after climbing from a low of 0.6224. At the time of writing, the pair is trading flat at around 0.6243. 

´´The Kiwi is at the upper end of the week’s ranges early this morning following a whippy night that also saw a rebound in the USD, which has of course meant that the Kiwi has done well on most crosses,´´ the analysts at ANZ Bank said in a note on Wednesday.

The analysts note that today is Budget day and say that it has been flagged as a no-frills one.

´´Rating agencies are hoping for restraint, and FX markets are in turn hoping that rating agencies give it a tick. But with the tax take slowing, demands on the public purse growing, and deficits expected to persist for longer, FX markets are worried rating agencies might caution us, especially given our record current account deficit.´´

Meanwhile, the US Dollar index, a measure of the greenback's value against six major currencies, climbed as high as 103.11 and to its strongest level since late March. There was the possibility of agreement on the US debt ceiling while US President Joe Biden expressed confidence an agreement will be reached. House Representative Speaker Kevin McCarthy argued that a debt-ceiling agreement by Sunday is doable. Meanwhile, US Vice President Kamala Harris is to brief on preventing a default on Thursday.

NZD/USD technical analysis

As per the prior day´s analysis, NZD/USD bulls in the market and eye a firm correction, the pair moved up into the 38.2% Fibonacci resistance and came close to a 50% mean reversion:

Prior analysis:

Update 1:

Update 2, live market:

There are still prospects of a move lower although the 4-hour and 1-hour charts can be used to gauge as to whether there is going to be a deceleration in the bullish correction and so far, it is early days still. After all, the price is still on the front side of the bullñish dynamic trendline support.