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Home ANALYSIS

NZDUSD trades above and below converged 100/200 hour MAs

A.R Chowdhury by A.R Chowdhury
March 31, 2022
Reading Time: 4 mins read
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NZDUSD

NZDUSD trades above and below the 100/200H MAs

The  NZDUSD 
NZD/USD

The NZD/USD is a commonly offered currency pair representing the New Zealand dollar or Kiwi and US dollar.  The pair is popular for exposure into a commodity currency, i.e. the NZD, which helps capture risk appetite for forex traders. Like its Antipodean counterpart, the Australian Dollar, the NZD/USD is seen as a carry trade, due in part to interest rate differentials which favor the NZD. The NZD is the world’s seventh most liquid pair at the time of writing with the USD being the world’s most traded currency and the NZD being the tenth. What Affects the NZD/USD? The NZD/USD is offered at virtually every retail forex brokerage and is a common pair for traders to have experience with.  The pair moves on investor sentiment and can be much more volatile than other pairs such as the EUR/USD, GBP/USD and others. Given New Zealand is the world’s largest exporter of milk powder, this metric is a key factor when driving the pair. Any sensitivity to milk powder exports is captured via the NZD/USD. Additionally, tourism is a key contributor to the New Zealand economy and as such help move the currency pair.  Other factors of note for the NZD/USD include export volumes to China as well as other important economic data releases from China.  Central banks also play a primary role in the direction of the currency pair with both the US Federal Reserve and the Reserve Bank of New Zealand being closely monitored by investors.  Monetary policy is more than capable of abruptly moving the NZD/USD, which can oscillate much more than other normal pairs.

The NZD/USD is a commonly offered currency pair representing the New Zealand dollar or Kiwi and US dollar.  The pair is popular for exposure into a commodity currency, i.e. the NZD, which helps capture risk appetite for forex traders. Like its Antipodean counterpart, the Australian Dollar, the NZD/USD is seen as a carry trade, due in part to interest rate differentials which favor the NZD. The NZD is the world’s seventh most liquid pair at the time of writing with the USD being the world’s most traded currency and the NZD being the tenth. What Affects the NZD/USD? The NZD/USD is offered at virtually every retail forex brokerage and is a common pair for traders to have experience with.  The pair moves on investor sentiment and can be much more volatile than other pairs such as the EUR/USD, GBP/USD and others. Given New Zealand is the world’s largest exporter of milk powder, this metric is a key factor when driving the pair. Any sensitivity to milk powder exports is captured via the NZD/USD. Additionally, tourism is a key contributor to the New Zealand economy and as such help move the currency pair.  Other factors of note for the NZD/USD include export volumes to China as well as other important economic data releases from China.  Central banks also play a primary role in the direction of the currency pair with both the US Federal Reserve and the Reserve Bank of New Zealand being closely monitored by investors.  Monetary policy is more than capable of abruptly moving the NZD/USD, which can oscillate much more than other normal pairs.
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has been trading above and below its near converged 100/200 hour MAs at 0.6938 area. The current price is trading at 0.6930 – below those two key moving average levels.

However, adding some caution is that the price has been trading above and below those MAs over the last 10-11 trading hours after the sharp move lower in the Asian session and into the European session. The lows for the day have found support against a swing area between 0.6922 and 0.6929 (see red numbered circles).

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A move below that area now is needed to have traders looking toward the 200 day MA at 0.6906.

What helped the run lower today?

Looking at the daily chart below, yesterday the price reached up to a new 2022 high of 0.69977. That move took the price to the highest level since November 22, 2021. However, at the high, the price tested the 50% of the move down from the 2021 high to the 2022 low. That midpoint level comes in at 0.69966 – just below the high price at 0.69977 from yesterday (see daily chart below).

Traders leaned against the level.

The price decline today was helped by that midpoint level holding. Now traders have to decide if the move off the high can extend the declines. Get below the 0.6922 level and then the 200 day MA at 0.6906 and the door would be further opened. Absent that, and the buyers are not done yet.

NZDUSD

NZDUSD stalled at the 50% midpoint yesterday
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A.R Chowdhury

A.R Chowdhury

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