The NZD / USD rising today even as New Zealand’s current account moves back into the deficit range. The pair has jumped to the highest level in over 2½ years and is one of the best performing pairs in the market.
What happened: The New Zealand bureau of statistics released the quarterly census data earlier today. The figures showed that the current account moved back into the deficit zone in the third quarter as imports rose. Overall, the deficit rose to $ 0.4 billion mainly due to a sharp rise in car imports.
What now? As a major currency, the NZD / USD will next determine the Fed’s flat rate that will come through the American session. This conclusion comes as the number of Covid cases in the U.S. continues to rise and as the country begins vaccination.
It will also come as the country is still struggling with the lack of encouragement from the conference. The decision will also meet the dollar at its lowest level in more than 2 years.
So the Fed could turn dovish, which pushed the NZD / USD pair higher. Alternatively, the bank could boost its economic outlook, which will be a good thing for the dollar.
NZD / USD technical view
What’s next for NZD / USD? The NZDUSD is trading at 0.7100, the highest level it has been in 2½ years. On the daily chart, we can see that the pair is supported by the short-term and medium-term moving averages.
Also, the stochastic oscillator and the Relative Strength Index (RSI) have started to rise above the overbought level. This means that, in the short term, the pair could continue to rise but we cannot rule out a bearish reversal.
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NZDUSD technical chart