The NZDUSD pair spiked to an intraday high of 0.6762, which is the highest it has been since July 2019. The pair rose mostly because of the weaker US dollar and the positive building consent data in New Zealand.
In a statement today, Statistics New Zealand said that there were more than 3,391 building permits in July 2020. While the number was 4% below the previous month, it was the third straight month of positive gains. In total, more than 10,000 buildings have been consented in the past three months.
In July, more than 6,805 consents were given out for additions and alterations on stand-alone houses in the last three months. According to the bureau, that was the second-highest three month total since the bureau started collecting the data in 1990.
However, on a negative side, the value of non-residential consents dropped by 11% to $6.7 billion in the year that ended in July 2020. That is because of the weak economy, which has affected the consents of hotels, motels, and other short-term accommodation. In a statement, the bureau said:
“We have seen the value of consents for short-term accommodation buildings drop in the last four months, likely reflecting the uncertainty the tourism industry is experiencing, with the border closed to new international visitors.”
The NZDUSD pair also rose because of the weaker dollar. The US dollar index has declined by more than 0.35%. This is partly because of the recent statement by the Federal Reserve chairman, who said that the bank is likely to retain low interest rates for longer.
NZDUSD technical analysis
The daily chart shows that the NZDUSD pair has been in an upward trend since March, when it was trading at 0.5468. Today, the pair has reached an intraday high of 0.6762, which is above the 50-day and 100-day exponential moving averages. The price is also above the ascending trend line that is shown in green.
The price is also slightly above the important resistance level at 0.6716. Therefore, the pair is likely to continue rising as bulls attempt to test the next resistance level at 0.6800.
On the flip side, a move below 0.6515 will invalidate this trend. This price is at the intersection of the ascending trend line and the lowest part on August 16.