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NZDUSD – Is This A Reversal In New Zealand Dollar?

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Aayush Jindal

NZDUSD – Is This A Reversal In New Zealand Dollar?

Key Highlights

  • New Zealand after a major break against the US Dollar failed to sustain gains, and moved down.
  • The NZDUSD pair failed to stay above the 0.7100 level, as there was an increase in the bearish pressure.
  • In New Zealand, the Business NZ PMI released by the Business NZ posted a rise from the last reading of 56.5 to 57.1 in May 2016.
  • In the US today, the Housing starts figure will be released by the US Census Bureau, at the Department of Commerce, which is forecasted to post a reading of 1.150M in May 2016.

NZDUSD Technical Analysis

The New Zealand Dollar recently broke a monster bearish trend line on the hourly chart, and traded as high 0.7090 where it found sellers. The NZDUSD moved down once again, but found bids near the broken trend line.NZDUSDThe pair is now back above the 100 and 200 simple moving averages on the hourly chart, and there is a chance of a more gains in the short term.However, the pair needs to break the 61.8% Fib retracement level of the last drop from the 0.7146 high to 0.6963 low to ignite more upsides.

Business NZ PMI

Today in New Zealand, the Business NZ PMI, which presents business conditions in New Zealand and is an important indicator of the overall economic condition was released by the Business NZ. The market was not expecting any major change in the PMI this time, but the outcome was positive. The Business NZ PMI managed to rise from the last reading of 56.5 to 57.1 in May 2016.Overall, the result helped the NZDUSD pair to recover some ground, and if the current trend continues it may climb further.

US Housing Starts

Today in the US, the Housing Starts, which is an indicator that tracks how many new single-family homes or buildings were constructed will be released by the US Census Bureau, at the Department of Commerce.The forecast is slated for a reading of 1.150M in May 2016, less than the last reading of 1.172M. Moreover, the Building Permits is forecasted to increase from the last reading of 1.116M to 1.150M. If the outcome of reports fail to match the forecast, then there is a chance of a further recovery in the NZDUSD pair.
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