Chart of the Day: NZD/USD

Chart of the Day: Spot NZD/USD (09/07/2020) | alb.com

Inspite of the surge seen in the Euro and the British Pound in recent days, I do believe that upside potential is limited in the short term particularly when we incorporate the fundamentals which on the surface seem to be positive measures being taken. Finance minister from the EU will be meeting virtually today ahead of the summit of their leaders on 17th - 18th July discussions over the bloc’s multi-year budget as well as a proposed €750 billion recovery fund for economies hit hardest by Covid-19. On Wednesday, the U.K. government detailed its latest stimulus plan, in the region of £30 billion Pounds aimed at getting consumers to support businesses as they reopen after three months of lockdown. Currently there are over 12 million coronavirus cases globally according to John Hopkins University data, and perhaps prompting the need to revise the decision to ease the lockdown. The U.S. has posted its largest number of daily new infections since the outbreak began, and investors will be wary of what the new earnings season will deliver when it begins in earnest next week. The U.S. Dollar is still unable to move above the 97 level while the New Zealand Dollar has closed intraday above the swing high on 10/06/2020 at 0.65847. There is little overhead resistance until it approaches the 0.6750 level where we also encounter the 200 exponential moving average currently at 0.6734. The move in the NZDUSD is a breakout trade from a range on the daily time frame, whilst from a weekly time frame, this is more of a bullish flag trade where the long term target is at 0.72400 but firstly, price will need to contend with the 200 period moving averages around 0.6734 (EMA) and 0.68068 (SMA) as well as a supply zone around the 0.6890 to 0.6950.

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