Fundamental Factors:
- Trump's failure to deliver something concrete in respect to economic reforms in his inauguration speech weighs on USD.
- S&P's last week affirmed New Zealand's ‘AA’ foreign currency rating and AA+ local currency long-term sovereign credit rating and said its outlook remains stable.
- A strong reading of China’s gross domestic product (GDP) released last week likely to keep commodity currencies supported.
Technical Analysis:
- NZD/USD extends gradual grind higher, is 0.64 percent higher on the day.
- Upside in the pair is struggling at 0.7225 which is major trendline resistance.
- Technicals support upside, break above could see test of channel top at 0.7285.
- On the flipside, close below 5-DMA could see weakness upto 0.7092 (200-DMA).
- Major support levels - .7177 (5-DMA) 0.71 (38.2% Fib of 0.7485 to 0.6862 fall), 0.7092 (200-DMA), 0.7070 (Double bottom - Jan 13 & dec 5)
- Major resistance levels - 0.7225 (trendline), 0.7285 (channel top), 0.73, 0.7370 (Sept 22 high)
Recommendation: Good to go long on breakout above 0.7225, SL: 0.7175, TP: 0.7285/ 0.73/ 0.7370
FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at 51.052(Neutral), while Hourly USD Spot Index was at -91.5802 (Bearish) at 0840 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
