NZDUSD has become impulsive and non-volatile after bouncing from 0.6950 area. NZDUSD strikes above 0.7000 key resistance as the Coronavirus second wave hit the U.S. economy again. Bulls to continue the bullish bias further? What are the charts and technical indicators are saying? Read on to find further insights into today’s NZD/USD Technical Analysis.
December 2, 2020, | AtoZ Markets – NZDUSD is currently trading around 0.7070 area and trying to climb upside. The dynamic level of 20 EMA carrying the price as strong support from an extended period. As per the current price action, NZDUSD may face strong resistance around 0.7080 to 0.7100 area in the coming days.
U.S. manufacturing movement eased back in November, with new orders back out from their most significant level in almost 17 years, as a resurgence, in COVID-19 cases the country over kept workers at home and plants briefly shut down to disinfect facilities. Moreover, the Institute for Supply Management (ISM) on Tuesday cautioned that non-attendance at factories and their providers just as troubles in returning and recruiting labourers would proceed to “dampen” manufacturing until the Covid-19 emergency finished.
On the other hand, Adrian Orr, the Governor of the Reserve Bank of New Zealand going to give a speech today on PTA (Policy Targets Agreement). Moreover, the current PTA requires the Bank to keep inflation somewhere in the range of 1 and 3 per cent on average over the medium term. The Bank actualises the monetary strategy by setting the Official Cash Rate (OCR), which is assessed eight times each year.
NZDUSD Strikes Above as the Coronavirus Second Wave Hit the U.S. Economy
NZDUSD is currently residing near 0.7070 area and trying to push upside. However, the price is currently reading around the very significant resistance level, which has worked very well in the past.
Image: NZDUSD 4 Hour Chart
According to the 4-hour chart, NZDUSD strikes above and currently trading around 0.7070 area; As per the current price action, if the price pushes further higher towards 0.7080 to 0.7100 area and rejects, the bears may regain momentum and decline towards 0.7000 to 0.6950 area in the days ahead.
In addition, the dynamic level of 20 EMA is currently residing below the price. It may work as strong support to push the price upside. However, the bears may regain momentum if the price can break below the dynamic level in the coming days.
NZDUSD May Revert Back to the Mean
According to the daily chart, NZDUSD strikes above as bulls are optimistic. As per the current price action, if the price rejects 0.7080 to 0.7100 area with an impulsive daily bearish candle, the bears may regain momentum and decline towards 0.7000 to 0.6950 area. So, if the price retraced towards 0.7000 to 0.6950 area and bounced upward, the bulls may sustain the bullish bias towards 0.7080 to 0.7100 area as a first target. The second target will be 0.7180 to 0.7200 area if the price breaks above 0.7080 to 0.7100 area in the coming days.
Image: NZDUSD Daily Chart
Furthermore, the dynamic level of 20 EMA is currently residing below the price. Along with the Kijun line and the Tenkan line. The dynamic level may pull the price down as a mean reversion. Besides, the Kijun line and the Tenkan line may work as a confluence of the dynamic level in the process.
To conclude, after an extended period of bullish momentum, the price requires a retracement before bulls continue further upward. A daily close will help to identify the definite momentum in the coming days.