The New Zealand currency (NZD) woke up to a rude shock on Friday as it began trading lower after reaching the highest level since the last week of January. After an extended surge in time and price, the NZD posted a falling closing price reversal at the top, which is common during an uptrend. It does suggest that selling is greater than buying just below the main top at 0.6629. If this gets eventually confirmed, the closing price phenomenon should trigger that initiation of a 2 to 3-day counter-trend break. As per the last confirmed reports, the NZD/USD was trading at -0.23%.
On the other hand, the surging demand for the US dollar has helped to drive the NZD to lower levels. The USD, along with other so-called safe-haven currencies, were well bid on Friday following the detection of new Coronavirus cases in the US, which undermined any chance of a quick economic recovery. It is alarming to note that more than 60,000 new cases of COVID-19 infections were reported across the country a couple of days back, which has severely dented the confidence of the native consumers to make a return to public spaces.
Financial experts claim that trading through 0.6600 will help to make ineffective the closing price reversal top and thereby initiate the restart of an upward tendency. The minor trend is on the up and it will surely change to down on the move through the last minor bottom at 0.6519 and this scenario will confirm a change in momentum. Going by the closing price reversal on the top yesterday and the early price scenario, the direction of the NZD/USD is going to be governed by the trader reaction to the Thursday’s low of 0.6551.