- NZD/USD catches a fresh bid after NZIER ups New Zealand’s growth outlook.
- The kiwi ignores the US dollar’s strength, as it bounces off key daily support.
- All eyes remain on the FOMC decision for the next direction in the kiwi.
NZD/USD is testing the daily highs near the 0.7150 barrier, having caught a fresh bid wave after the New Zealand Institute of Economic Research (NZIER) revised up the South Pacific Island nation’s near-term economic growth outlook.
The NZIER said in its latest report, “the near-term growth outlook has been revised up … annual average growth in GDP is expected to reach 5 percent in March 2022.”
New Zealand’s renewed economic optimism outweighs the broad-based US dollar strength, as markets look for fresh cues on the Fed’s monetary policy path, with the FOMC meeting scheduled this week.
The NZD bulls also ignored the dismal Business NZ PSI (May) and G7’s take on China, as the kiwi found some solid support at 0.7115.
On the daily chart, it can be seen that the price has bounced off the abovementioned critical support level, which is depicted by the horizontal (orange) trendline connecting previous lows.
This comes as the Relative Strength Index (RSI) sees an upturn, looking to recapture the 50.00 level.
The rebound could face stiff resistance around 0.7185, the confluence of the 50 and 100-Daily Moving Averages (DMA).
Meanwhile, a daily closing below 0.7115 could trigger a steep drop towards the 200-DMA at 0.7035.
