NZD/USD Price Analysis: Upward momentum gathers pace after trendline breakout

Tuesday's trendline breakout is boding well for the NZD/USD pair.
The Kiwi is solidly bid despite the talk of negative rates in New Zealand.
The pair could challenge recent highs near 0.6130.

Omkar Godbole FXStreet Contributor

The New Zealand dollar continues to gain ground in Asia despite the talk of negative rates in New Zealand and pushing the NZD/USD pair higher.

At press time, the currency pair is trading at session highs near 0.6092, representing a 0.59% gain on the day.

The Kiwi breached the trendline April 14 and April 20 lows on Tuesday, marking an end of the pullback from 0.6130 and a resumption of the upward move from lows under 0.55 printed in March.

The breakout also validated the higher low at 0.5910 created on April 23 and shifted risk in favor of a re-test of 0.6130 (April 14 high).

Westpac and Capital Economics said on Tuesday that the Reserve Bank of New Zealand may cut interest rates to negative territory in November, strengthening the offered tone around the Kiwi. The NZD/USD pair fell to 0.60 during the Asian trading hours only to bounce back and end the day above the trendline hurdle.

BNZ, however, thinks the central bank is unlikely to implement negative rates before the second quarter of 2021.

The NZD/USD's short-term outlook would turn bearish under 0.5992, the low of the long-tailed candle created on Tuesday.

Daily chart

Trend: Bullish

Technical levels

NZD/USD

Overview
Today last price	0.6092
Today Daily Change	0.0036
Today Daily Change %	0.59
Today daily open	0.6055

Trends
Daily SMA20	0.6
Daily SMA50	0.6073
Daily SMA100	0.6323
Daily SMA200	0.6363

Levels
Previous Daily High	0.6074
Previous Daily Low	0.5991
Previous Weekly High	0.6092
Previous Weekly Low	0.5911
Previous Monthly High	0.645
Previous Monthly Low	0.547
Daily Fibonacci 38.2%	0.6042
Daily Fibonacci 61.8%	0.6023
Daily Pivot Point S1	0.6006
Daily Pivot Point S2	0.5957
Daily Pivot Point S3	0.5923
Daily Pivot Point R1	0.6089
Daily Pivot Point R2	0.6123
Daily Pivot Point R3	0.6172

Author

Omkar Godbole

FXStreet Contributor

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

EUR/USD flirts with weekly lows near 1.1770

EUR/USD now comes under further selling pressure, breaking below the 1.1800 support to challenge the area of weekly throughs near 1.1770 on Thursday. The pair’s decline comes in response to marked gains in the US Dollar amid steady geopolitical tensions. Ealier in the day, the ECB’s Lagarde delivered cautious remarks, although the currency remained apathetic.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold sticks to the bid bias, flirts with $5,200

Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The precious metal adds to Wednesday’s optimism despite the Greenback trades in a firm fashion, although geopolitical tensions in the Middle East keep the yellow metal bid for now.