The New Zealand Dollar (NZD) extended upside movement against the US Dollar (USD) yesterday, increasing the price of NZDUSD to more than 0.6800 and confirming the bullish reversal following some key economic releases. The technical bias remains bullish because of a Higher Low in the recent downside wave on four-hour timeframe.
As of this writing, the pair is being traded near 0.6778. A support may be noted near 0.6746-0.6750, the confluence of psychological number as well as swing low of the recent downside move ahead of 0.6716, the low of 10th May as demonstrated in the following chart.
On the upside, the pair is likely to face a hurdle near 0.6847, the swing high of the recent upside rally ahead of 0.6952 which is a major horizontal resistance level. The technical bias will remain bullish as long as the 0.6716 support area is intact.
US Housing Data
U.S. housing starts rose more than expected in April as builders ramped up the construction of single and multi-family homes, supporting views that the economy was regaining steam early in the second quarter.
Groundbreaking increased 6.6 percent to a seasonally adjusted annual pace of 1.17 million units, the Commerce Department said on Tuesday. March’s starts were revised up slightly to a 1.10 million-unit rate from the previously reported 1.09 million-unit pace. Economists polled by Reuters had forecast housing starts rising to a 1.13 million-unit pace last month. The government revised seasonally adjusted housing starts data from January 2014 through March this year.
Considering the overall technical and fundamental outlook, buying the pair on a downside move could be a good strategy in short to medium term.