The NZDUSD currency pair is poised for an impressive eighth consecutive day of gains, brushing off concerns raised by a weaker-than-expected retail sales report. Speculation surrounding a potential hike in the Reserve Bank of New Zealand’s 5.5% cash rate at next week’s policy meeting has provided a significant boost. However, the recent downturn in retail sales figures may influence these expectations. Year-over-year figures declined from -3.4% to -4.1%, while quarterly numbers dropped to -1.9% from the previous -0.8%.
In the US, the market remained relatively unfazed by the release of the FOMC minutes, indicating a cautious approach among members toward rapidly easing rates. This stance had already been factored into market expectations. As the week progresses, the question looms: will the currency pair maintain its winning streak until the week’s end?
Technical
On the 4H chart, an ascending channel is in play as the currency pair continues to move higher. The 25-SMA (green line) has surpassed the 50-SMA (blue line) and 100-SMA (orange line), confirming a bullish tilt, but divergence in the RSI signals a potential pullback in the upcoming sessions.
Resistance at 0.6206 could be the first barrier to the continuous bullish momentum. If a pullback gets triggered at this level, the breakdown could occur. Support at 0.6184 could then be in focus for a potential retracement, but an additional leg lower could shift the spotlight toward 0.6165 and 0.6155 to provide potential buyers.
However, the impressive ascent could continue if resistance at 0.6206 gets cleared. At the higher end of the channel, resistance is established at 0.6226 and could be a level of interest if the bullish momentum is sustained in the week’s closing session.
Summary
Despite a slump in New Zealand’s retail sales, the NZDUSD currency pair has maintained its winning streak intact and looks poised to complete eight consecutive days of gains. Resistance at 0.6206 could be worth keeping an eye on in the upcoming session to determine whether the bulls can maintain their upper hand within the channel.
Sources: Koyfin, Tradingview
Piece written by Tiaan van Aswegen, Trive Financial Market Analyst
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