NZDUSD has been on a bullish momentum for the last few trading days. Since June 29, the currency pair has finished with gains every single trading day except once. As of this writing, NZDUSD is trading slightly higher at 0.6571 from its opening price at 0.6566.
Yesterday, the currency pair was boosted by the uptick in dairy prices. The NZX milk futures saw an uptick to $7.00 for Fonterra’s milk price for 2020-2021. This was bullish for NZD because dairy is New Zealand’s largest export product. And so, higher dairy prices also imply higher income for the country.
For today, ANZ reported that business confidence for July improved to -29.8 from -34.4 in June. However, it would seem that this was not enough to push NZDUSD to its 2020 highs.
On the daily time frame, it can be seen that NZDUSD is trading around where it peaked on June 2020. If there are enough buyers to push the currency pair past its June 10 highs at 0.6583, it could mean that we may soon see NZDUSD trade all the way up to 0.6754 where it topped on December 31.
NZDUSD, Daily Chart
On the other hand, if resistance holds, we could see the currency pair trade lower and give up some of its gains. A strong close below today’s Asian session lows at 0.6561 could mean that NZDUSD would soon fall to 0.6539 where it may find support at the rising trendline (when you connect the lows of July 2, July 3, July 7, and July 8).
Reversal candlesticks at this price could indicate that the currency pair may soon resume its uptrend. However, a strong bearish close below the trendline support may mean that NZDUSD could fall to 0.6499 where it may test the 200 SMA for support.