Invezz.com – The pair rose after relatively strong trading numbers from New Zealand. It rose to 0.6218, a few points above this week’s low of 0.6135. Overall, the Kiwi is up 3.67% since June.
New Zealand trade is recovering
The New Zealand economy is not doing well. Data released last week showed the country slipped into recession in the first quarter after the RBNZ pushed interest rates to a 14-year high. The economy shrank 0.1% in the first quarter after contracting 0.7% in the previous quarter.
Economic data released on Thursday showed the country’s trade improved in May. Exports increased to $6.99 billion in May from $6.61 billion in April. Likewise, imports increased from $6.37 billion to $6.99 billion. That means the country’s trade surplus has dropped from $236 million to $4 million.
The Reserve Bank of New Zealand is one of the most aggressive central banks in the world. It has raised interest rates from 0% to around 5.50% during the pandemic in an effort to combat inflation. The latest data showed New Zealand’s inflation rose 6.7% in the first quarter after rising 7.2% in the previous quarter.
The next big forex news A look at Federal Reserve Chairman Jerome Powell’s testimony in Congress. On the first day of his testimony, Powell reiterated that the war on inflation had not yet been won. He expects the bank to deliver at least two more rate hikes.
The NZD/USD pair is also reacting to upcoming US current home sales figures.Economists expect sales to ease slightly in May.
NZD/USD Technical Analysis
NZD/USD Chart by TradingView
The 4-hour chart shows that the NZD to USD pair rose on trading numbers from New Zealand. It is slightly above the 25 and 50 period moving averages. The pair rose above the 50% Fibonacci retracement level. It is just above the Ichimoku Cloud indicator.
Hence, the pair is likely to continue higher as buyers target the next major resistance point at 0.6247, the highest point of the month. If this happens, the bulls need to force above this level to avoid a double top formation. A double top is usually a bearish sign.
NZD/USD Forecast as New Zealand Exports and Imports Rise appeared first on Invezz.
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