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The last time NZD/USD 0.53% approached these prices where in early Feb 2017.
And the accompanying rate statement stated: ” The exchange rate remains higher than is sustainable for balanced growth and, together with low global , continues to generate negative in the tradables sector. A decline in the exchange rate is needed.”
This resulted in the NZD/USD 0.53% moving down by 300 pips.
Due to solid job gains and decreasing , increase in household spending and expansion of business investment, the US FOMC decided to increase interest rates, on June 14th.
With a rather hawkish statement accompanying this decision, the US Dollar -0.31% quickly gained strength, bouncing off the 96.45 .
Whilst some of this gain was reversed at the end of the week, what has developed, is the formation of a possible reversal, through an inverted head and shoulder pattern.
Therefore, if DXY -0.31% is able to break above 97.40, that would be a completion of the pattern, indicating further upside to the USD.
Something to keep an eye on.
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