NZDUSD is in a clear downtrend since early 2021 but it is trending up in the short term. But the short-term trend which started in October is in danger. Today’s trade balance and consumer confidence data are not helping that too.

Consumer confidence fell to 73.8, a record low of all time. Rising rates are clearly testing confidence. In the other data, the trade deficit narrowed but the downtrend of the trade balance is beginning to steepen its slope which is bad news for NZD.

On the other side, the expected dovish turn from the FOMC is not gone exactly as the market has hoped. Members start to talk about higher rates for a longer time, despite slowing the hiking speed. Bank of Japan’s recent yield curve decision could be positive for NZD, but it is still unclear if the moves will continue there.

The trend is near the Fibonacci %23.6 retracement level. Both supports merged together could form strong support. But if it broke, it could trigger a short-term downtrend or at least a deeper correction. RMI indicator is also signaling a possible down move, crossing its signal moving average over 90. It usually gave relatively reliable signals where the cross happens from near or above 70. For up moves, the latest top of 0.6515 could be followed as a signal for a breakout for a more positive outlook.