The NZDUSD pair is up slightly today after it dropped sharply yesterday. The pair is trading at 0.6670, which is a few pips above the yesterday’s low of 0.6650.
The New Zealand dollar is gaining slightly today mostly because of the overall weaker US dollar, with dollar index falling by 0.15%.
It is also gaining as traders wait for the Reserve Bank of New Zealand (RBNZ) interest rate decision. The bank started its meeting today and is expected to release its decision tomorrow. Like other recent central bank releases, analysts expect the bank will leave interest rates unchanged. Most of the analysts polled by Reuters expect the bank will also signal its intention to leave rates unchanged until at least March next year.
The RBNZ rate decision comes at a time when the country has managed to curb the spread of the coronavirus pandemic. In a statement yesterday, Jacinda Arden said that Auckland will move to level 2 of lockdown while the rest of the country will move to level 1. The two levels remove most of the restrictions that were put in place when the second wave started.
Meanwhile, the RBNZ decision comes ahead of the country’s election that will happen in October. Jacinda is facing Judith Collins and the polls show that Arden will retain her seat.
NZDUSD technical outlook
The daily chart shows that the NZDUSD pair formed a double top pattern at 0.6792 on September 2 and September 18. And yesterday, the price reached a weekly low of 0.6650. The price has moved slightly below the ascending red trend line. It has also moved slightly below the 20-day and 10-day exponential moving averages, which is usually a bearish sign.
As such, in the next few days, I suspect that the pair will move lower and test the important support at 0.6600. This is an important psychological level that is also the lowest level on September 9. It is also at the intersection of this low and the rising trendline. On the flip side, a move above the double top resistance at 0.6796 will invalidate this trend.
Don’t miss a beat! Follow us on Telegram and Twitter.
NZD/USD chart
More content
- Download our latest quarterly market outlook for our longer-term trade ideas.
- Follow Crispus on Twitter.
- Do you enjoy reading our updates? Become a member today and access all restricted content. It is free to join.