Daily Market Recap - NZDUSD

The NZDUSD reached an eight-month high on Tuesday topping at 0.6703 before retreating lower towards the 0.66515 support level. Selling pressure kicked in after the pair showed signs of a bearish closing price reversal top earlier in the session.

The move in the Kiwi Dollar was likely triggered by gains in the greenback in anticipation of the two-day Federal Reserve meeting on Tuesday and news that the US Congress is edging closer to agreeing to a new fiscal stimulus package as the current one expires on Friday.

On the economic data docket today, the US consumer confidence and the Redbook retail indices were released at 92.6 and -8.7 percent respectively. The underwhelming figures combined with a slow start to the US stock market has sent traders into the safe havens gold and US treasuries. It would appear that economic recovery in the US is weaker than expected in July.

From a technical perspective, the NZDUSD is maintaining its upward momentum since from March lows. The upper 2017 trendline has kept gains above 0.67051 in check after having been tested 4 times in the past week. The pair is currently trading in a consolidation pattern, but the market does appear to be looking for a reason to break above the 0.67 handles.

(Chart Source: Tradingview 28.07.2020)

Should the pair manage to cross firmly above the 0.67050 resistance level, the next likely target will be the 0.67887 marks, levels last seen in July 2019. On the flip side, a failure to regain above 0.6685 in the coming session will indicate the presence of sellers and may trigger a correction in the NZDUSD towards the 0.65686 support channel.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.