We expected NZD to edge higher yesterday but we were of the view that it ‘is unlikely to break the major resistance at 0.6200’. However, NZD took out 0.6200 and surged to 0.6250. Upward momentum is strong and we expect NZD to rise further. That said, overbought conditions suggest 0.6300 could be out of reach today. Support is at 0.6220, followed by 0.6190.

Our latest narrative was from last Friday (18 Nov, spot at 0.6135) where NZD is likely to consolidate and trade within a range of 0.6035/0.6200. Yesterday (23 Nov), NZD surged above 0.6200. The price actions indicate that the consolidation phase has ended. In other words, we anticipate NZD gains from here, likely to 0.6200, possibly 0.6240. The upside risk is intact as long as NZD does not move below 0.6145 (‘strong support’ level).

This has happened with a move that has been in development for some time given the coil and breakout of the 0.6000 and 0.6100 areas. This has the potential to move towards the daily highs as illustrated below on the daily;y time frame all the while the bulls stay front side of the daily trendlines.

NZD/USD is marching towards the horizontal resistance placed from August 12 high at 0.6469 on a daily scale. The asset has comfortably established above the 61.8% Fibonacci retracement (placed from August 12 high at 0.6469 to October 13 low at 0.5560) at 0.6103. The pair has crossed the 200-period Exponential Moving Average (EMA) at 0.6233 for the first time in the past seven months.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which indicates more upside for the Kiwi Dollar.

NZDUSD To Correct itself Before more Upside

Nov 24 2022