NZD/USD perky in early Asia as US dollar meets firm resistance, 0.6540s on bull's radars

NZD/USD perky in early Asia as the US dollar could well give back territory in immediate sessions.
RBNZ's hawkish lean should remain supportive to the bird, much will depend on the developments in the coronavirus.
China's Hubei province confirms another 1,933 new cases of coronavirus and 100 new deaths as of Feb 16th.
0.6550s is key in the pursuit of the 0.6500/20/40 resistances.

Ross J Burland FXStreet

NZD/USD has opened today a tough firmer in a bullish short term ascending triangle, trading around 0.6440 a the time of writing following a tight range on Friday between 0.6423 and 0.6444. The focus has been with the coronavirus as the total number of coronavirus cases in mainland China reaches almost 70,000.

China's Hubei province confirms another 1,933 new cases of coronavirus and 100 new deaths as of Feb 16th while China’s National Health Commission this weekend, confirmed 142 additional deaths as of February 15th. However, there is a sense in the markets that the virus can be contained which has lead to increased risk appetite supporting the commodity complex, enabling a bottoming in the retracement of the rally following the Reserve Bank of New Zealand's hawkish meeting.

Eyes on the US dollar at this juncture

At this juncture, the US dollar needs to give back some ground for there to be a full-on and convincing accent in the commodity currencies. There's been no let-up to the DXY’s uptrend to date, with the price firmly grounded on the 99 handle with 2019's high at 99.67 as the next stop. The broad sweep of US data so far in 2020 has been reassuring and last year’s 75bp in Fed cuts has been insulating the US more than most.

However, Friday's data in the December industrial production that came in well below expectations, as well as disappointing details within the Retail Sales data, will potentially cap the dollar's advance for the immediate sessions in what is a US holiday. The Atlanta Fed lowered its GDPNow forecast of Q1 GDP growth from 2.73% to 2.35%. On the other hand, the sentiment behind the US elections with President Donald Trump as a clear front runner this year could continue to underpin the dollar's upside, potentially weighing on commodities.

It then boils down to the central banks. With the Federal Reserve seen to be on hold, the RBNZ's revised OCR forecasts should underpin the bird. The revised forecast shows the OCR remaining at 1.00% throughout 2020, and indicating a hike by Q4 2021.

NZD/USD levels

The bird has broken the ascending tringle's resistance on the hourly time frame, having completed a 61.8% Fibonacci retracement of the recent range between the Feb. lows and post-RBNZ highs. Bulls will look for 0.6550 to hold as an important support structure before advances towards 0.6500/20/40 resistances.

NZD/USD

Overview
Today last price	0.6442
Today Daily Change	0.0009
Today Daily Change %	0.14
Today daily open	0.6433

Trends
Daily SMA20	0.6499
Daily SMA50	0.6579
Daily SMA100	0.648
Daily SMA200	0.65

Levels
Previous Daily High	0.6445
Previous Daily Low	0.6423
Previous Weekly High	0.6488
Previous Weekly Low	0.6377
Previous Monthly High	0.6741
Previous Monthly Low	0.6453
Daily Fibonacci 38.2%	0.6431
Daily Fibonacci 61.8%	0.6437
Daily Pivot Point S1	0.6422
Daily Pivot Point S2	0.6412
Daily Pivot Point S3	0.64
Daily Pivot Point R1	0.6444
Daily Pivot Point R2	0.6456
Daily Pivot Point R3	0.6466

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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