Up by 0.52%, the NZDUSD pair is among the best-performing major pairs today. It is trading at 0.6622, which is higher than the intraday low of 0.6585 as traders wait for the Reserve Bank of New Zealand (RBNZ) interest rate decision that will come out tomorrow at 02:00 GMT.
New Zealand’s economy has made some great progress in recent months. Media reports suggest that business activity has returned to normal in most cities. However, some sectors of the economy like transport and tourism are yet to recover.
Therefore, investors are waiting for what the RBNZ, under Adrian Orr, will deliver tomorrow. Analysts polled by Reuters expect that the bank will leave interest rates unchanged at 0.25%. They also believe that the bank will sound cautious about the ongoing recovery, especially now that neighbouring Australia is going through a second wave.
Still, the meeting will come at a time when economic data from New Zealand has been relatively strong. For example, recent data showed that the unemployment rate declined to 4%, which is a good number considering that in the US, the rate is 10.2%. Another data released three weeks ago showed that the business PMI rose to 56.3, the highest level since April 2018. This growth is probably the reason why the NZDUSD pair has been on an upward trend in recent weeks. It has gained by more than 4% in the past three months.
NZDUSD technical outlook
The NZDUSD pair is trading at 0.6622. The daily chart shows that the price is slightly above yesterday’s low of 0.6572 and is also above the 50-day and 100-day exponential moving averages. But, the price seems to have formed a double top pattern that is shown in pink below. It is also along the ascending black trend line.
Therefore, I suspect that the price will attempt to decline because of the double top pattern. If it does, the next target will be 0.6500, which is slightly above the 23.6% retracement and along the 50-day EMA. On the flip side, a move above the double top at 0.6720 will invalidate this trend.