NZDUSD has formed higher lows and lower highs on its 1-hour time frame, creating a symmetrical triangle formation. Price is making its way towards the top of the triangle, possibly to test the resistance at the .6500 major psychological level.
If this level keeps gains in check, price could move back to the bottom of the chart pattern and test support at the .6400-6450 area. A break below this level could take price down by an additional 250 pips, which is roughly the same as the height of the chart pattern. Similarly, an upside break from the triangle resistance could spur a 250-pip climb.
The moving averages are oscillating, which shows that buyers and sellers still haven’t picked a clear direction. Stochastic and RSI are both on middle ground but are on the move up, indicating that buying pressure is present at the moment.
Earlier in the week, both the FOMC and RBNZ announced their decision to keep monetary policy unchanged for the time being. While the Fed reiterated that they’d be tightening at a gradual pace, they expressed a bit of concern about the global economic developments. Meanwhile, the RBNZ stated that they’re open to easing again if the conditions call for it.
Prior to this, Fonterra announced downgrades in its milk price and payout forecasts, which confirms that the industry is having trouble staying afloat given the challenges in the global economy.
Up ahead, US advanced GDP readings are due and a 0.8% growth figure is eyed. Weaker than expected results could mean more losses for the US dollar while strong data could push NZDUSD lower.