NZD/USD is extending its four-day winning streak

NZD/USD is solidly bid for the fifth day straight and is currently trading at a 12-day high.
The American dollar is on the defensive, courtesy of the rising odds of the US-China breakthrough trade deal and due to rising evidence of the US economic slowdown.

Omkar Godbole FXStreet Contributor

NZD/USD is currently trading at 0.6687, the highest level since Feb. 6.

The currency pair closed higher for the fourth consecutive day on Friday. That was the first four-day winning streak since mid-November.

Further, it could end the day on a positive note, as the American dollar is being offered on the rising odds of a US-China trade deal and the resulting risk-on action in the equities. After all, the greenback was the preferred safe haven in 2018.

Also supporting the bullish case is the growing evidence of a deeper slowdown in the US economy. Both inflation and the retail sales - two of the most important measures for the Fed - printed below expectations last week, validating the central bank's recent dovish turn.

Major investment banks like JP Morgan have also cut their Fed rate hike forecast to a single increase in 2019 and 2020.

The Kiwi, however, may not find acceptance above 0.6894 (78.6% Fib R of Feb. 1 high/Feb. 2 high) if the trade optimism fades.

Technical Levels

1. R3 0.6956
2. R2 0.6916
3. R1 0.689
PP 0.685
1. S1 0.6824
2. S2 0.6784
3. S3 0.6758

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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