The NZD/USD price is in a strong upsurge as investors react to the latest RBNZ interest rate decision and the overall weak US dollar. The NZDUSD has risen for the past four consecutive weeks and is close to the highest level since July 2017. It has jumped by more than 30% from the lowest level last year.
What happened: The RBNZ completed its interest rate decision meeting yesterday. As most economists were expecting, the bank decided to leave interest rates at 0.25%, and its quantitative easing program target at N$100 billion. The central bank also said that more support was needed to help the economy recover.
Today, the NZD/USD is reacting to the relatively strong business confidence data. According to ANZ Bank, business confidence declined from 9.4 in January to 7.0 in February. Own activity declined from 21.7% to 21.3%. Later today, the pair will react to the latest US GDP, jobless claims, and pending home sales numbers.
NZD/USD technical outlook
The four-hour shows that the NZD/USD price has been on a sharp uptrend in the past few months. It reached a high of 0.7455 this week and then pared-back some of those gains to a low of 0.7416.
The pair’s rally is being supported by the 25-day and 15-day exponential moving averages. The Relative Strength Index (RSI) has also risen to 76, signaling that the pair is getting overbought. It is its highest point since December. Therefore, while the uptrend will remain, we should not rule out a short-term pullback in the near term.
NZDUSD technical chart
Go to the news source: NZD/USD Forecast: Most Overbought Since December