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NZD/USD steady around 0.6800

FXStreet (Córdoba) - NZD/USD continues to move sideways around 0.6800 as it has been the case since Friday’s American session.

Consolidating after modest correction

Last week NZD/USD reached at 0.6897 the highest level in three months and then started to retreat. The bearish correction found support above 0.6780. Today it bottomed at 0.6782 and then bounced to the upside and hit 0.6819.

While the downside remains limited by 0.6780, the key short term resistance is located at 0.6820, that limit the upside today and also during Friday’s American session.

NZD/USD outlook

The pair posted the third weekly gain in a row as it continues to recover from multi-year lows. The rally pushed traders to evaluate the sustainability of recent movements and how far it could go.

“We look for USD strength returning in the near future ahead of a first Fed hike in January, NZD/USD could still move lower on a sustained divergence in monetary policy. We thus expect NZD/USD to edge lower again near term”, said analysts from Danske Bank. They expect that in a 6 to 12 months horizon, negative factors affecting the pair to slowly fade, “and with upside risks to agricultural prices from a structural point of view, we expect NZD/USD to stabilise around the 0.70 mark, our long-held 12M forecast.”

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