NZDUSD – GDP data send pair down

The New Zealand dollar fell back from its resistance area (D) on the daily chart, as GDP data show that the country’s economy contracted 0.9% during the last three months of 2020. The Reserve Bank of New Zealand could be pressured to support the economy with additional monetary stimulus and may keep the door open to negative interest rate policy. The NZDUSD pair is currently trading below its 50 moving average, near the 0.7100 – 0.7130 support zone (A).

This level has been touched by the course three times already. If the fourth try managed to break this support, the next level would be around the 0.7000 – 0.7030 zone (B). Breaking below this support could indicate a longer term correction after a year long advance and send the course towards the 0.6620 support level (C). On the other hand, positive data and risk taking sentiment could push the price through resistance D and challenge the previous peak at 0.7460 (E).