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New Zealand Dollar Retreats from January High

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Looking at the NZD/USD currency exchange rate on the above daily MT 4 price action chart, the New Zealand dollar has fallen to an intra-day low of 0.7260 during the early Asian trade session on Tuesday. This Forex market is paring back some gains overnight after hitting the January high price point.

This morning the Assistant Governor at the Reserve Bank of New Zealand (RBNZ) gave an interview to Reuters News. RBNZ assistant governor Christian Hawkesby said that the central bank is in no rush to make any changes with monetary policy or interest rates. His comments were to dissuade Forex traders that the RBNZ would make any sudden rate moves.

Assistant governor Christian Hawkesby said the “markets are keen to get ahead of central banks but there will inevitably be false starts and that is why we are seeing some of the volatility in bond markets at the moment.” He went on to comment that “our approach is to continually remind markets that we are going to be patient, and we are in no hurry to remove stimulus.”

The Reserve Bank of New Zealand met last week and kept their overnight cash rate (OCR) and monetary policy as is. The central bank, after their decision, said that “it would maintain easy policy settings for a prolonged period.”

Daily New Zealand Dollar Technical Analysis (NZD/USD)

Looking at price action the first downside barrier lines up at the fifty (50) day simple moving average. This support level is at 0.7210/09 for today. A downside break from here opens the door for the upward sloping trend in play since late 2020 at 0.7190.

The next downside barrier comes into play at 0.7130 with the round number of 0.71 then coming into focus. This is also an area of multiple low price points from back in January.

On the upside, a daily close above 0.7135, which is the 24 February and the January high price point will open the door for the NZD/USD Forex market to challenge 0.7370. The next layer of technical resistance lines up at 0.7465.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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