The NZD/USD pair staged a solid reversal in the Asian trades and now looks to extend the rebound 0.7300 levels, as the bulls continue to cheer a jump in the NZ consumer confidence data.
NZD/USD eyes fresh fundamental drivers
The spot reversed more-than half of yesterday’s sharp drop, triggered by a pick-up in USD buying across the board, after the treasury yields shot higher on hawkish comments delivered by the FOMC member Dudley.
Over the last hour, the spot has entered a phase of upside consolidation, as investors turn cautious and look to take profits off the table ahead of Fonterra’s fortnightly dairy auction results.
Moreover, stabilizing oil prices also lend support to the commodity-currency NZD, while the spot also benefits from a pause in the US dollar rally across the board.
All eyes now remain on the NZ GDT price index, especially after the GDT index booked the sixth consecutive rise and remains +57% on annualized basis.
NZD/USD Levels to consider
Omkar Godbole, Analyst at FXStreet noted: “A break above 0.7247 (Feb 23 high) would expose 0.7319 (June 14 high) and 0.7350 (Jan 31 high). On the downside, a break below 0.72 (zero figure + 23.6% Fib R of May low - June high) would open up downside towards 0.7171 (June 12 low), 0.7147 (June 2 high) and 0.7127 (38.2% Fib R). The RSI has turned lower from the overbought region, while the MACD bearish divergence has been followed by a bearish crossover confirmation. Caution is advised as indicators suggest a pullback could be in the offing. “
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