New Zealand Dollar Forecast: NZD/USD May Rise Over Thanksgiving Holiday

New Zealand Dollar, NZD/USD, Thanksgiving – Talking Points

• Wall Street trading paused from recent strength after two-day rally
• NZD/USD continues higher, technical picture bullish in short-term
• U.S. holiday and light economic prints see quiet session ahead

New Zealand Dollar strength is seeing follow-through after government officials recommended that the RBNZ include housing prices to the central bank’s remit earlier this week. The comments increased bets for the RBNZ to keep a lid on further rate cuts. In turn, the Kiwi appears to be on a firm bullish footing for the short-term.

Wall Street took a step back today after a bullish start to the week. The Dow Jones Industrial Average traded below the recently breached 30,000 level. The lull in momentum, however, appears more like a temporary pause on some profit-taking rather than being driven by a shift in sentiment.

That said, this morning did inject some concern into the U.S. labor market as initial jobless claims rose to the highest level in over a month. However, local durable goods orders came in better than expected according to the DailyFX Economic Calendar. The US Dollar basket softened from yesterday’s Asia-Pacific session through the New York closing bell. DXY price action recently dropped under the 92 handle to lows not seen since the start of September.

NZD/USD, US Dollar, Dow Jones – Daily Price Chart

Chart created with TradingView

Thursday’s Asia-Pacific Outlook

Trading in the Asia Pacific session may reflect the calmer tone from Wall Street as U.S. markets are set to close for the Thanksgiving holiday. Economic data prints are also light going into the trading session. These two factors may see a low volume session outside of any unexpected headline risks that could appear.

NZD/USD price action is on the verge of breaking out of a Rising Wedge pattern formed from the March Covid lows. This is typically a bearish formation, and overturning it could underpin the case for further upside. Earlier this week the Kiwi broke above the 2019 high and is currently resting directly above the upper-bound of the wedge. A retracement back to the 2019 high, however, could still leave bulls in control. The case for a reversal in the longer-term trend in NZD/USD seems unlikely absent a negative fundamental driver.

NZD/USD Daily Price Chart

Chart created with TradingView

NZD/USD TRADING RESOURCES

— Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or @FxWestwateron Twitter