The NZDUSD price rose in early trading as traders reacted to the mixed New Zealand trade numbers. The pair is trading at 0.6690, which is a few pips below this month’s high of 0.6700.
In a report released earlier today, Statistics New Zealand said that the country’s exports declined from the previous N$4.41 billion to N$4.01 billion. This decline was partly because of a decline in dairy exports. The price of milk powder, butter and cheese fell by $97 million while preparations of milk and cereals declined by 26%.
Imports, on the other hand rose from N$4.69 billion to more than N$5.02 billion. As a result, the trade deficit widened from N$282 million to more than N$1.01 billion. The country imported $1.7 billion less in crude oil and $1.1 billion less in cars since February. Still, these declines were offset by a $392 million increase in war ships.
The NZDUSD is also rising because of the overall weaker US dollar as traders starts to downplay the impact of the rising number of Covid-19 cases. The dollar index, which measures the strength of the greenback, is down by 0.13% today.
NZDUSD technical outlook
On the four-hour chart, we see that the NZDUSD price has been in a relatively tight range recently. During this period, the pair has formed a bullish flag pattern that is shown in purple. It is also being supported by the 25-day and 15-day exponential moving averages. Notably, the price is above the 61.8% Fibonacci retracement level.
Therefore, I suspect that the pair will continue rising as bulls aim for the 78.6% retracement at 0.6731. On the flip side, a move below 0.6600 will invalidate this trend. This price is an important psychological level that is also slightly below the 61.8% retracement.