NZDUSD trades slightly higher on Friday after yesterday’s sharp correction. The pair started a correction from the 25-month highs as the last week USD gained momentum. Risk-off sentiment prevails, as the sell-off in big tech companies continues, and investor’s preference shifted to safe-haven assets such as USD. The US Congress failed for one more time to pass a COVID-19 relief package as Democratic party opposed to the bill, arguing that it did not include local government relief assistance.
New Zealand Business PMI Below Expectations
On the economic data, the New Zealand Business PMI came in at 50.7, below the forecasts of 66.8 in August, as the government re-tightened the coronavirus restrictions in August. The New Zealand, Food Price Index, registered in at 0.7% topping the expectations of 0.2% in August. Job advertising slipped 3.1% to the lowest level since April.
Reserve Bank of New Zealand in the August policy meeting expended the asset purchase programme up to 100 billion, while left the door open for further stimulus in the next policy meeting on September 22.
NZDUSD Daily Technical Analysis
NZDUSD trades higher in Asian session at 0.6663 as the pair consolidates the recent correction. The pair retreated in early September from 0.68 mark and tested the support at the 50-day moving average.
The outlook remains positive above 0.66. Bulls face the resistance at 0.6713 the top from yesterday. A break above would attract more bids targeting 0.6789 the high from September 2.
On the other hand, the critical support is at 0.6618 – the 50-day moving average. In case the bears break that level, then the next support is at 0.6544 the low from August 26.
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NZDUSD Daily Chart