The kiwi dollar rose against the greenback on Friday, taking the price to more than 0.7740 recovering the losses occurred because of the unexpected US GDP data on Tuesday.
As of this writing, the pair is being traded around 0.7740. As compared to the last trading session where the pair remained quiet throughout the day, today the pair has shown some movement and extended upward to overcome the recent losses. Moving upward, the pair is expected to face a hurdle around 0.7771, the confluence of 38.2% Fib level and ascending trendline. Success in breaking this level, the pair may move forward to test a major resistance around 0.7821, the confluence of 50-day SMA, 50% Fib level and descending trendline, as demonstrated in the following chart.
On the downside, an immediate support may be seen near 0.7709, the 23.6% Fib level. The said level has been supporting the pair on various occasions during the previous 2 months. Breaching this level, the pair may find another support around 0.7608, the yearly low and swing low of the last dip.
The pair however is still in consolidation phase. It is expected to correct in near future around 0.7771 as demonstrated by the merging trend lines on the daily chart.
The overall bias is however is bearish because of lower lows and lower highs on the daily chart. The bias will remain bearish as far as the resistance area 0.8033 is intact.
The economic calendar does not hold much for today. However, a fall in the price of NZD/USD is expected because of strong US GDP data that is going on at its fastest pace since 2003. Better than expected data intensified the expectations of FED interest rate hike. The recent data moved the USD index to the highest level since the 2008 financial crash. Therefore, the NZD/USD may have to face selling pressure in short to medium term in response to the growing US economy.
In the light of technical and fundamental analysis, selling the pair around current levels is preferred only if the price leaves a bearish engulfing bar on the daily chart