After six consecutive days of correction lower the Kiwi finally seems to be getting a foothold once more.
The NZ dollar has been a laggard of late confirming that the decision by Governor Wheeler and his team at the Reserve Bank to cut interest rates this month continues to linger.
The outcome of the move was to put a lid on NZD strength; great news for Kiwi exporters, and particularly the under-fire dairy sector.
Even pound sterling, another laggard in global FX, has been afforded the chance to advance.
GBP to NZD conversions have risen from 2.0627 to highs at 2.14. Given, we are lower today at 2.1165, but a base has formed and sterling maintains some kind of form.
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New Zealand to US Dollar Exchange Rate Wants to Move Higher
The NZD to USD conversion is meanwhile looking more constructive.
“This comes as a bullish key one day reversal (or bullish engulfing candlestick) has formed. This is a powerful one day pattern that really changes the sentiment. It also comes as the positively configures momentum indicators have turned up again after a near term corrective phase,” says Richard Perry at Hantec Markets.
Perry cites the RSI indicator as turning up from high 40s again, while the is MACD still above neutral and Stochastics Crossing higher again.
“The support around $0.6670 is now increasingly important as this level has been used as the floor for the past three sessions,” notes Perry.
Taking a less-positive view on the New Zealand dollar’s prospects are analysts at LMAX Exchange.
In a briefing on the NZD to USD conversion analysts say the market remains confined to a broader downtrend with rallies continuing to be very well capped ahead of medium-term
resistance at 0.6900.
“However, a break back below 0.6546 will be required to strengthen the outlook and expose fresh declines towards next key support at 0.6347 further down. Ultimately, only a weekly close back above 0.6900 compromises the bearish outlook,” say LMAX.