The kiwi is pushing onward to .8400 after bouncing off of .8202 after a series of positive economic data and dollar weakness. The New Zealand business confidence almost hit a 20-year high jumping from a reading of 28 to 52 in December, according to New Zealand Institute of Economic Research Inc.
House prices also hit a six-year high after jumping ten percent year-over-year in December. Quotable Value New Zealand reported this was the fastest annual gain since 2007.
New Zealand has been able to stack together encouraging data which is allowing increasing speculation that the Reserve Bank of New Zealand (RBNZ) will need to eventually raise interest rates from the current historical low of 2.5 percent.
NZDUSD is currently stalling in a confirmed supply zone on the 4H after increasing roughly 185 pips since January 10. The longer price action stalls, the more likely for a pullback. The RSI is extended to just under 71. A pullback to support levels of .8345 and .8325 are possible given the recent run, but the outlook is still bullish for the kiwi.
A pullback to these levels could become potential buying opportunities as the ADX is sloping higher through 21, indicating that trend strength is strong. The +DMI is pulling back, but if buying is found at support levels, the +DMI should remain elevated.
However, short-term dollar sentiment is too the downside, and this will benefit the kiwi. If the supply zone can be overtaken, probable upside targets of .8445 and .8490 are initiated.