NZD/USD Forecast – New Zealand Dollar Eyeing Major Breakout

NZD/USD Forecast – New Zealand Dollar Eyeing Major Breakout

  • – The New Zealand dollar failed to break the 0.7220 resistance against the US Dollar and remains at a risk of a breakdown.
  • – There is a crucial triangle pattern formed with resistance at 0.7220 on the 4-hours chart of NZD/USD.
  • – In New Zealand, the Trade balance figure for Jan 2017 was released by Statistics New Zealand, which posted a trade deficit of $-3.47B, more than the last $-3.17B (revised).

 

New Zealand Trade Balance Jan 2017

In New Zealand, the Trade balance figure for Jan 2017 was released by Statistics New Zealand. The forecast was aligned for a trade deficit of around $-3.30B in Jan 2017, compared with the same month a year ago.

 

However, the result disappointing, as the trade deficit was $-3.47B. The last reading was revised from $-3.20B to $-3.17B. The monthly change in the trade balance was also on the lower side, as there was a deficit of $-285M, more than the last revised $-36M. The report added that “Milk powder, which made up 56 percent of the milk powder, butter, and cheese commodity group in January 2017, more than offset lower sales for other goods, leaving overall exports up 0.3 percent ($13 million)”.

 

Overall, the result was on the lower side, which might weigh on the NZD/USD pair, and could ignite a break below 0.7170.

 

NZD/USD Technical Analysis

The New Zealand Dollar was under a lot of pressure lately, as it failed to break the 0.7220 resistance against the US Dollar and moved down. Every time there was an upside move, NZD/USD faced sellers like near 0.7245 and 0.7220.

 

NZD/USD Technical Analysis New Zealand US Dollar

 

At the moment, the pair is trading above a major support of 0.7170, and attempting a recovery from the 61.8% Fib retracement level of the last wave from the 0.7129 low to 0.7246 high. However, the upside move won’t be easy.

 

There is a crucial triangle pattern formed with resistance at 0.7220 on the 4-hours chart, which may act as a breakout pattern for NZD/USD. Its resistance also coincides with the 100 simple moving average (H4) at 0.7220. So, if the pair fails to break the 0.7220 resistance, there is a high probability of it moving down and breaking the triangle support at 0.7170.

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