NZD/USD has been continuing its bullish trend since Friday after finding a major support around 0.8125-0.8130 region which is 50% fibo level of last major move from 0.7719 to 0.8524.
The pair has already surged more than 100 pips since Friday when this bullish trend was triggered. Price action, however, still shows some real strength of upward movement.
At the time of writing, the spot is around 0.8235, it is likely to find immediate support at 0.8221 which is 23.6% fibo level of recent drop, a fall below this level may trigger further downside movement up to 0.8167 (100 SMA) ahead of 0.8134 (200 SMA) and then 0.8125-0.8130 region (50% fibo level of 0.7719/0.8524). A break below this level may push Kiwi-Greenback pair in long term bearish trend.
On Upside, the pair may find resistance at 0.8254 (trendline resistance), ahead of 0.8281 (38.2% fibo level of recent drop) and then 0.8331 (50% fibo level of recent drop). MACD is showing no sign of divergence on any timeframe which means any upward or downward movement may continue in short term.
We have three major economic reports in Kiwi basket this week:
- Trade Balance: Tuesday, 21:45 (GMT)
- ANZ Business Confidence: Thursday, 1500 (GMT)
- Building Consents: Thursday, 21:45 (GMT)
Today US Consumer Confidence report is also due in US Session and a better reading of 72.9 is expected this time around as compared to previous reading of 71.2. In London session, US dollar Index, which gauges the value of USD against a basket of six major currencies, is slightly down at 80.77. Not to mention, dollar gave yesterday a positive closing of 80.95 thanks to landmark Iran deal and US growth optimism.
If we get better than expected consumer confidence report today, it may help greenback to continue bullish trend.