The NZD stands out as not only being the strongest performing currency over the past 24 hours, but also one of only a few to actually move in the languid pre-FOMC trading conditions. The NZD/USD climbed around 0.9% overnight, to 0.8240.
It’s difficult to pinpoint the exact catalyst for the kiwi’s gains. But solid demand from technical accounts and another robust GDT dairy price auction probably go some of the way.
The 0.8165/85 zone in the NZD/USD is becoming an important one for technical traders. Resistance has been found here in the past, and 0.8185 also happens to be the 200-day moving average. The fact the currency managed to bust its way through these levels last night seems to have buoyed NZD demand amongst technical and momentum players. Indicative of such, our momentum model entered a long NZD/USD position at 0.8163.
Read the full report: FX Daily
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