NZD/USD appeared to be threatening the ascending channel from earlier this year as it slipped toward the 50-Day SMA (0.6799), but the exchange rate m
NZD/USD appeared to be threatening the ascending channel from earlier this year as it slipped toward the 50-Day SMA (0.6799), but the exchange rate may continue to hold above the moving average as it snaps the series of lower highs and lows from the yearly high (0.7034).
NZD/USD bounces back from a fresh monthly low (0.6806) as theUS Consumer Price Index (CPI)generates a bearish reaction in the US Dollar, and the exchange rate may stage a larger recovery over the coming days as it seems to be carving a bullish outside day candle formation.
NZD/USD Rate Daily Chart
Source: Trading View
The broader outlook for NZD/USD remains constructive as it cleared the opening range for 2022 in March, with the 50-Day SMA (0.6799) developing a positive slope as the exchange rate established an upward trending channel.
Nevertheless, lack of momentum to close above the Fibonacci overlap around 0.6940 (50% expansion) to 0.6990 (23.6% retracement) pushed NZD/USD below channel support, but the exchange rate appears to be reversing course ahead of the 50-Day SMA (0.6799) as it snaps the series of lower highs and lows from the yearly high (0.7034).
Failure to break below the 0.6770 (23.6% expansion) to 0.6810 (38.2% expansion) area may push NZD/USD back above the 0.6870 (50% retracement) region, with a move above the 200-Day SMA (0.6902) bringing the overlap around 0.6940 (50% expansion) to 0.6990 (23.6% retracement) back on the radar.
However, a break/close below the 0.6770 (23.6% expansion) to 0.6810 (38.2% expansion) area opens up the March low (0.6729), with the next area of interest coming in around 0.6690 (38.2% expansion) to 0.6710 (61.8% expansion).
— Written by David Song, Currency Strategist
Follow me on Twitter at @DavidJSong
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