The NZDUSD moved above its 200 day moving average (green line in the chart above) the first day of December, and stayed above that level December 22 when the price closed below the moving average level. However the very next day the price moved back above and stayed above until today.
Once again, the price moved below the 200 day moving average but failed again. The 200 day moving average currently comes in at 0.6230. The low price today reached 0.6199. The current price is trading at 0.6253.
The 200 day moving average will be the key barometer for the pair as we start the new year. Stay above is more bullish. Move below and stay below would be more bearish. On the downside, the swing area between 0.6184 and 0.6212 would give sellers more confidence. Today the low price stall between those levels at 0.6199.
On the upside in the short term, getting above the 50% of the 2022 trading range at 0.62719 would give the buyers more confidence.
Fundamentally, the Reserve Bank of New Zealand does not meet again until February 21. The quarterly CPI data will be released on January 24. The last quarterly CPI from October 17 came in at 2.2% versus 1.5% expected.
The employment data for the quarter will not be released until January 31.
GDP released on December 14 for the third quarter came in much stronger at 2.0% well above the 0.8% expected. The rise was driven by rebounding construction, services and tourism after reopening earlier in 2022.
The inflation and GDP gains have economists looking for a 50 basis point hike at the RBNZ's next meeting in February.
Despite those expectations, the central bank and the treasury expect a recession in 2023.
With such uncertainty and expectations, the technicals will likely help to drive the bias one way or the other. The 200 day moving average is the first major barometer for that bias defining clue.