NZDUSD trades sharply higher as the Fed open-ended quantitative easing program announced yesterday boosted investors sentiment. The New Zealand Reserve Bank announced on Monday the establishment of a temporary USD swap line with U.S. Federal Reserve to support the provision of USD liquidity up to $30 billion. RBNZ also said that is actively involved in the financial markets and will use all tools available to provide smooth market functioning amid the coronavirus outbreak crisis.
On the economic data, the Manufacturing PMI came in at 49.2, topping the forecasts of 42.8 in March. The Services PMI came in at 39.1 below the forecasts of 42. The Composite PMI dipped to 40.5 in March from previous 49.6. The United States Redbook Index came in at 1.7% on March 20 above the previous reading of 1.1%. The yearly reading for the Redbook Index increased to 9.1% on March 20 from the previous 8.5%.
NZDUSD is 1.45% higher at 0.5804 as the pair managed to rebound from the recent lows. The technical outlook is clearly bearish for the pair despite the recent rebound, but I can’t rule out a further upward move as theee RSI is ssstill in oversold level and makes an attttempt to exit the oversold area.
On the upside, the first resistance for NZDUSD stands at 0.5839 the daily high. In case the buyers break above then the next target would be at 0.5961 the high from March 20. More selling pressure would be met at 0.6098 the high from March 17.
On the other side, first support will be met at 0.5687 the daily low. In case that the NZDUSD pair breaks below, the next support zone stands at 0.5588 the low from yesterday’s trading session.