NZD/USD back below 50% Fibo, carving out fresh lows in thin trade headed in to early Asia
|- NZD/USD has made a fresh low as North American market draw to a close on a session where liquidity was thin considering due to a holiday in remembrance of President George Herbert Walker Bush which has been designated a national day of mourning by President Donald Trump.
- NZD/USD is currently trading at 0.6891, the low of the session so far, down from a high of 0.6944.
NZD/USD was at the mercy, once again, of external flows. The greenback has been a star performer on its own right, despite the collapse in US yields which had only started to stabilise into the close yesterday ahead of the holiday for bond markets today. The DXY rallied in late NY trade on Tuesday from a low below 96.40 and scored a high of 97.20 before slipping back to 96.95. The dollar has found renewed demand due to continued global trade uncertainties and the high betas, such as the Kiwi, are suffering on a return to the downside in the stock markets that saw a vicious turnaround into the close on Wall Street yesterday.
Eyes on China and Australia
There will be no local major domestic data today although The Australian trade balance and retail sales are both out which could bring some life into the antipodes.
"Despite China pledging to push forward with some elements of what it agreed with the US, the NZD is facing the going a little tougher at present as it starts to run out of steam after a steady grind higher. Resistance up in the mid-to-high 69s looks reasonable, and while a test cannot be ruled out again, that is unlikely to be today," analysts at ANZ Bank New Zealand reported.
NZD/USD levels
- Support 0.6850
- Resistance 0.6980
The bird recently penetrated the 50% Fibo of the 2018 downtrend but has run into resistance of R1 located at 0.6966. However, the pair remains above S2 and the gap for the tie being which leaves a bullish bias for the pair until bears can break below the 200-D SMA located at 0.6860. Below there, 38.2% retracement Fibo (at 0.6810) comes into focus where a strong level of support would be expected, outside of any shifts in fundamentals. On a refocus of the upside, the bird can head towards the 61.8% Fibo at 0.7048.
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