- New Zealand Dollar traded lower against the US dollar during the past few hours and tested the 0.6750 support area.
- The NZDUSD pair is currently attempting to recover and also broke a bearish trend line formed on the hourly chart.
- The pair is above the 100 hourly simple moving average, which is a positive sign for the bulls.
- Today, the US Chicago Fed National Activity Index (CFNAI) released by Federal Reserve Bank of Chicago posted a decline to -0.29 in Feb 2016.
The New Zealand Dollar was under selling pressure during the Asian session against the US dollar. The NZDUSD pair after trading near 0.6750 found support and started to correct higher. The pair also broke a bearish trend line formed on the hourly chart to clear the way for more gains.
The pair is currently struggling to break the 38.2% Fib retracement level of the last drop from the 0.6874 high to 0.6748 low where it is facing offers.
However, the most important resistance is near the 50% Fib level, coinciding with the 50 moving average.
Chicago Fed National Activity Index (CFNAI)
Today, the Chicago Fed National Activity Index (CFNAI), which is a monthly index designed to gauge overall economic activity and related inflationary pressure was released by Federal Reserve Bank of Chicago. The outcome was disappointing, as there was a decline from the last reading of 0.41 (revised) to -0.29 in Feb 2016.
The report stated that the “index’s three-month moving average, CFNAI-MA3, edged up to –0.07 in February from –0.12 in January. February’s CFNAI-MA3 suggests that growth in national economic activity was slightly below its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year”.
Overall, the NZDUSD pair may trade higher, but could face sellers near the 0.6810-20 resistance area.