NZD/USD rangebound around 0.7000 amid lack of fresh kiwi drivers

NZD/USD trades within very tight ranges around 0.7000 amid quiet FX market trade due to US Thanksgiving holidays.
The pair seems content to stabilise close to recent highs as it awaits further macro drivers.

Joel Frank Independent Analyst

NZD/USD has been going sideways for most of the session around the 0.7000, despite slight risk-off flows being observed in equities and crude oil markets. Indeed, FX markets have been for the most part rangebound today amid quiet market conditions given that US participants are away for Thanksgiving holidays.

Kiwi awaits fresh drivers

Having been boosted this week to fresh multi-year highs and reconquered the psychological 0.7000 level on a combination of USD weakness this week, as well as rumblings regarding a potentially hawkish change to the RBNZ’s inflation remit, kiwi seems content to await further drivers.

What these further drivers might be remains to be seen. With things set to be quiet on the RBNZ front over the coming weeks and little by way of crucial New Zealand data next week, NZD/USD is most likely to continue to be driven by global risk appetite and the US dollar.

NZD/USD forming a bullish flag

Having shot to the upside and beyond 0.7000 on Wednesday (the pole), NZD/USD has since formed something of a bullish flag, implying that an upside break and further gains are a strong possibility. If this was to be the case, the most important level of note would be the recent high at 0.7015. Beyond that, the next major areas of resistance would be the 0.7050 mark and June 2018 highs at 0.7060 just beyond it.

Looking at the pair on a longer time horizon; NZD/USD also broke above a long-term uptrend during its Wednesday rally that linked the 9 and 10 June, 21, 21, 28 and 31 July and 2 September highs. The pair is currently retesting this trendline, which some bulls might see as a good opportunity to jump in with longs in order to ride the upside breakout.

NZD/USD eight hour chart

NZD/USD one hour chart

Author

Joel Frank

Independent Analyst

Joel Frank is an economics graduate from the University of Birmingham and has worked as a full-time financial market analyst since 2018, specialising in the coverage of how developments in the global economy impact financial asset

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