The New Zealand Dollar rallied against the US Dollar after a softer US inflation report, with NZD/USD trading at 0.5809, up more than 1%. The pair stalled at a cluster of moving averages after touching a daily high of 0.5843.
The New Zealand Dollar extended its rally against the US Dollar, trading at 0.5809 and gaining more than 1%. The move followed the latest US inflation report, which tempered speculation of a Fed rate hike and trimmed investors' bets by half.
Rally stalls below the moving averages
The pair keeps struggling against its Simple Moving Averages. It still trades below the 50- and 200-day SMAs at around 0.5810 to 0.5819, so the broader trend remains downward. Earlier in the session the pair reached a daily high of 0.5843, threatening to clear the 200-day SMA, but sellers stepped in and drove spot prices back toward the 0.5800 figure.
Momentum, however, is turning in the buyers' favor. The Relative Strength Index turned bullish on July 9, yet price action consolidated around 0.5750 for three days before the next leg up to 0.5800.
What the levels say next
A clean break above the 50- and 200-day SMAs would open the path to the 100-day SMA at 0.5834. Beyond that, a breach exposes the March 19 daily high at 0.5892, ahead of 0.5900, and on further strength the February 26 high at 0.6014 becomes the next area of interest.
The bearish case runs the other way. If sellers push the pair through the session low at 0.5744, the move could accelerate toward 0.5700, with the July 8 daily low at 0.5672 as the next area of demand below it.
Source: FXStreet
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