NZD/USD rallies above critical 0.72; dollars bulls 'nowhere to be found'

Currently, NZD/USD is trading at 0.7226, up +0.47% or 34-pips on the day, having posted a daily high at 0.7234 and low at 0.7176.

The New Zealand dollar vs. American dollar experienced during the NA trading session a fast recovery as the pair quickly erased losses banking 44-pips. Furthermore, an anemic US GDP Index at 2.0% slashed any short-term support dollar bulls could have expected, later 'a better than expected' Consumer Confidence figure was not sufficed at 114.80 to seduce bulls to allocate new positions.

On the NZD data front, the New Zealand Herald reported on the latest business confidence figures, "NZ business confidence slipped in February while remaining relatively optimistic, as the country's pace of economic growth starts hitting a "mature stage" where it becomes harder to keep hitting new highs. A net 16.6% of firms are optimistic about the general outlook for the economy, down from 21.7% in December, according to the ANZ Business Outlook."

DXY inter-markets: not so ‘phenomenal’

Historical data available for traders and investors indicates during the last 9-weeks that NZD/USD pair had the best trading day at +1.60% (Jan.17) or 115-pips, and the worst at -1.26% (Jan.18) or 89-pips. Furthermore, the US 10yr treasury yields have traded from 2.37% to 2.34%, down -0.60% on the day at 2.35% or -0.0142.

Technical levels to watch

In terms of technical levels, upside barriers are aligned at 0.7245 (high Feb.23), then at 0.7332 (high Feb.8) and above that at 0.7402 (high Nov. 8). While supports are aligned at 0.7172 (low Feb.23), later at 0.7118 (50-DMA) and below that at 0.7075 (low Jan.16).

On the other hand, Stochastic Oscillator (5,3,3) seems to shift direction to head south. Therefore, there is evidence to expect further Kiwi losses in the near term.

On the long term view, if 0.6888 (low Jan. 2017) is in fact, the bottom for the first semester in 2017, then upside barriers are aligned at 0.7303 (short-term 61.8% Fib), to avoid 'false breakouts,' only an open and close above this level would open doors towards 0.7400 round figure.

To the downside, supports are aligned at 0.7096 (short-term 50.0% Fib), then a dense support region between 0.6951 (reverse long-term 38.2% Fib) and 0.6888 (short-term 38.2% Fib).

AUD/USD eyes a test of the 0.77 handle