- NZD/USD started an upside correction from the 0.5468 yearly low.
- A crucial bearish trend line was breached with resistance near 0.5750 on the 4-hours chart.
- The US Durable Goods Orders increased 1.2% in Feb 2020, up from the last revised 0.1%.
- The US Gross Domestic Product is likely to grow 2.1% in Q4 2019.
NZD/USD Technical Analysis
This month, the Aussie Dollar declined heavily from well above 0.6000 against the US Dollar. NZD/USD even traded below the key 0.5800 support area to move further into a bearish zone
Looking at the 4-hours chart, the pair traded as low as 0.5468 and settled well below the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
The pair is currently correcting higher and trading above the 0.5650 resistance. Besides, there was a break above a crucial bearish trend line with resistance near 0.5750.
The pair even tested the 50% Fib retracement level of the main slide from the 0.6342 high to 0.5468 low. On the upside, an initial resistance is near the 0.5950 level.
The main resistance is near the 0.6000 level, which is close to the 61.8% Fib retracement level of the main slide from the 0.6342 high to 0.5468 low. Therefore, the pair is likely to face a strong selling interest if it reaches 0.6000.
If NZD/USD fails to continue high above 0.5950 or 0.6000, it could start a fresh decline. An initial support is near the 0.5800 level and a connecting bullish trend line. If there is a downside break below the 0.5800 support, the pair is likely to accelerate lower towards 0.5650.
Fundamentally, the Durable Goods Orders report for Feb 2020 was released by the US Census Bureau. The market was looking for a 0.8% decline in orders.
The actual result was better, as the US Durable Goods Orders increased 1.2% in Feb 2020. Besides, the last reading was revised up from -0.2% to +0.1%.
The report added:
Excluding transportation, new orders decreased 0.6 percent. Excluding defense, new orders increased 0.1 percent. Transportation equipment, up two of the last three months, drove the increase, $3.8 billion or 4.6 percent to $87.0 billion.
Overall, the US Dollar is correcting gains against the Euro, GBP, AUD and NZD. However, it is likely to bounce back in the near term.
Upcoming Economic Releases
- BoE Interest Rate Decision – Forecast 0.25%, versus 0.10% previous.
- US Initial Jobless Claims – Forecast 1000K, versus 281K previous.
- US Gross Domestic Product Q4 2019 – Forecast 2.1% versus previous 2.1%.