NZD/USD Corrects Lower From Multi-Month Highs

Key Highlights

• NZD/USD traded to a new multi-month high at 0.7119 before correcting lower.
• Key supports are forming near 0.7050 and 0.7010 on the 4-hours chart.
• AUD/USD also corrected lower after trading to a new multi-month high at 0.7578.
• The US Manufacturing PMI (to be released today) could decline from 56.7 to 55.7 in Dec 2020 (Prelim).

NZD/USD Technical Analysis

In the past few weeks, the New Zealand Dollar gained momentum above 0.6900 and 0.7000 against the US Dollar. NZD/USD even traded to a new multi-month high at 0.7119 before it started a downside correction.

Looking at the 4-hours chart, the pair settled nicely above the 0.7000, the 200 simple moving average (green, 4-hours), and the 100 simple moving average (red, 4-hours).

Recently, there was a downside correction from the 0.7119 high. The pair traded below the 0.7080 support level. It tested the 50% Fib retracement level of the upward move from the 0.7009 swing low to 0.7119 high.

On the downside, there are a few key supports forming near the 0.7050 and 0.7000 levels. There is also a connecting bullish trend line forming with support near 0.7050 on the same chart.

If there is a downside break below the trend line support, the pair could correct towards the 0.7000 support. Conversely, NZD/USD might resume its upside above 0.7080 and 0.7100. The next major resistance is near 0.7140.

Looking and EUR/USD and GBP/USD, there were mostly bullish moves. On the other hand, USD/JPY is gaining bearish momentum below 104.00.

Upcoming Economic Releases

• UK Consumer Price Index Nov 2020 (YoY) – Forecast +0.6%, versus +0.7% previous.
• UK Core Consumer Price Index Nov 2020 (YoY) – Forecast +1.4%, versus +1.5% previous.
• Germany’s Manufacturing PMI Dec 2020 (Preliminary) – Forecast 56.4, versus 57.8 previous.
• Germany’s Services PMI Dec 2020 (Preliminary) – Forecast 44.0, versus 46.0 previous.
• Euro Zone Manufacturing PMI Dec 2020 (Preliminary) – Forecast 53.0, versus 53.8 previous.
• Euro Zone Services PMI Dec 2020 (Preliminary) – Forecast 41.9, versus 41.7 previous.
• UK Manufacturing PMI Dec 2020 (Preliminary) – Forecast 55.9, versus 55.6 previous.
• UK Services PMI Dec 2020 (Preliminary) – Forecast 50.5, versus 47.6 previous.
• US Manufacturing PMI Dec 2020 (Preliminary) – Forecast 55.7, versus 56.7 previous.
• US Services PMI Dec 2020 (Preliminary) – Forecast 55.9, versus 58.4 previous.
• US Retail Sales Nov 2020 (MoM) – Forecast -0.3%, versus +0.3% previous.
• Canadian Consumer Price Index Nov 2020 (MoM) – Forecast 0%, versus +0.4% previous.
• Canadian Consumer Price Index Nov 2020 (YoY) – Forecast +0.8%, versus +0.7% previous.