During May and June 2017 the New Zealand dollar has strengthened significantly in price thanks to strong statistics from Australia and increases in food prices. The weakening of the USD also impacted the formation of the upward micro trend. Until this moment, the NZD was falling in value. However, the NZD has recovered and reached its level from January 2017.
This week the New Zealand dollar continues to hold relatively high positions and consolidated at the level of 0.72 USD. On July 3 the NZD reached a higher level of 0.73 USD due to increases in the prices for milk and wheat, which reached its highest value for the year due to the low yield forecasts for 2017. Still, the U.S. dollar managed to strengthen due to data on the reduction of US trade deficits, export growth, and the growth index for the non-manufacturing sector (ISM), which reached its highest level in two years - 57.4, indicating the increase of activity in the services sector. Also, according to the protocol of the FOMC meeting, they decided to raise the Federal funds rate to 1-1.25%. The New Zealand has lost in value also through the careful rhetoric of the RNBA, who left interest rates unchanged again, aiming for the acceleration of inflation and strengthening the economy. Therefore, they are not interested in further strengthening the NZD.
On the daily chart you can see that the rates continue in the flat trend with a wide range. Volatility remains very high for the NZD/USD currency pair. In this situation it's better to pay attention to the entry points 0.724 and 0.733, which can be indicators of an exit from the flat trend in the medium-term trading.
