NZD/USD has gained every day this week and is seen breaking above November highs today to break to a 10-month high. The pair broke higher during the Asian session and fell into a consolidation near the day’s high shortly after the European open.
The currency pair will close a second Consecutive week in the green and has gained in 9 out of the past 10 sessions to add 8.5% or roughly 580 points. This week’s close will mark the highest weekly close in 14 months.
The New Zealand Dollar had persistently lagged the Australian dollar in the first half of the week but has gained upside momentum since breaking to fresh 2017 highs yesterday. At the same time, the Australian dollar has lost upside momentum, leading to a two-day decline of 170 points in AUD/NZD to take the pair back into negative territory. The currency pair is on pace to post a shooting star candle on a weekly chart with an unusually large tail that suggests rallies next week will be short-lived.
The US dollar index (DXY) is on pace to post a second consecutive week of losses. A bulk of this week’s losses were as a result of the ECB meeting which sent the euro higher against all of its major counterparts. The euro is the strongest performer this week, followed closely by the Swiss franc and then the Kiwi dollar. The British pound is the weakest and the only currency that shows a weekly loss versus the greenback.
There were not any economic releases pertaining to NZD/USD today. Next week, the highlight will be the Fed meeting on Wednesday and US quarterly GDP figures on Friday.
This week’s technical break in NZD/USD will tend to keep the pair bid on dips next week. Support for the pair falls at the November high of 0.7402 followed by the prior 2017 high of 0.7375. The next level of interest to the upside is the 2016 high of 0.7585