The New Zealand Dollar (NZD) extended upside movement against the US Dollar (USD) on Wednesday, increasing the price of Kiwi Dollar to more than 0.6800 following some key economic events particularly the Fed chief Jannet Yellen’s dovish remarks.
As of this writing, the pair is being traded near 0.6848. A hurdle may be noted around 0.6883, the intraday high of today ahead of 0.6897-0.6900 which is the confluence of last major upside rally on the weekly chart as well as psychological number. A break and daily closing above the 0.6900 resistance area could push the pair into a stronger bullish trend, validating a move towards the 0.7000 handle.
On the downside, the pair is likely to find a support around 0.6818, the horizontal support (the high of 4th March) ahead of 0.6667, the swing low of the recent downside move on the daily timeframe as demonstrated in the above daily chart.
Global economic and financial uncertainty poses risks to the U.S. economy and justifies a slower path of interest-rate increases, Federal Reserve Chairwoman Janet Yellen said in remarks that suggested little appetite to raise rates when officials meet next month. “Given the risks to the outlook, I consider it appropriate for the committee to proceed cautiously in adjusting policy,” Ms. Yellen said Tuesday before the Economic Club of New York. She didn’t give details about the timing of the next rate increase. Fed policy makers are set to meet next April 26-27.
Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy in short to medium term if we get a valid bearish reversal candle on the daily chart.