NZDUSD trades 0.16% higher at 0.6435 registering gains for fifth consecutive session boosted by the optimism around trade talks between the two biggest economies and the extension in Brexit until January 31st. The Treasury of New Zealand revised lower its estimate for neutral interest rate by 75 basis points to 3%. The Treasury also pointed out about the downside risks to New Zealand’s economy, amid worsening business surveys and global sentiment. During the weekend New Zealand reportedly agreed to upgrade free-trade agreement with China.
New Zealand trade gap narrowed for September versus the same month of the previous year, as exports increase by 5.1% to NZD 4469 million and imports declined 2.1% to NZD 5710 million. NZDUSD felt pressure after RBA cut rates and investors increase bets that RBNZ will follow. RBNZ, in its last monetary policy committee, left interest rates unchanged at 1% as widely expected by markets. The central bank of New Zealand noted that the risks are to the downside amid trade tensions, geopolitical turbulence and low business confidence.
NZDUSD hit fresh three month highs today but the pair rejected at the 100-day moving average at 0.6465. On the upside, strong resistance stands 0.6365 today’s top and also the 100-day moving average, the next target is the 0.6491 the high from August 8th.
On the flip side, immediate support stands at 0.6426 daily low and then at 0.6406 the low from last Friday, a convincing break below might force the pair down to 0.6340 the 50-days moving average. NZDUSD short term outlook is neutral now and only a break above the 100-day moving average might initiate another leg higher.Download our latest quarterly market outlookfor our longer-term trade ideas.
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