NZD/USD: bears looking for a test of the 61.8% Fibo
|- NZD/USD has been crumbling below the 200-hr SMA and now the 21&10-4hr SMAs.
- NZD/USD suffered a stronger dollar, weak Chinese data and month-end flows.
NZD/USD has been attempting to break up on two significant rallies, one which met supply just ahead of the bearish channel resistance scoring a high of 0.6612 on the 21st Oct and again at 0.6573 on the 30th October falling even shorter of the resistance line.
The greenback is firm and attempts to sell it have been met by dominant flows of demand due to ongoing geopolitical tensions and higher yields in US treasuries. The Us economy continues to outpace that of Europe, China and elsewhere overseas which is an additional factor underpinning the greenback. The latest contrasts were made between the US ADP jobs beating big time whereas China PMIs and German retail sales both missed expectations.
Analysts at ANZ Bank New Zealand Limited explained that the NZD was sold overnight, with month-end rebalancing at play, but also weaker Chinese data weighing:
"Downward drift could continue, given economic fundamentals. But global developments will add noise, with US mid-terms approaching and trade tensions percolating, as domestic markets await the RBNZ’s November MPS."
NZD/USD levels
- Support 0.6460
- Resistance 0.6620
NZD/USD is testing the 50% retracement of the latest rally from 0.6465 25th Oct lows to 0.6573 30th Oct highs. A break there brings in the 61.8% Fibo at 0.6505. S3 is located at 0.6478. On the flipside a break of the descending channel's resistance line and 0.66 the figure opens the room to 0.6634 as the 76.4% Fibo target, (20th Sep/7th Oct range).
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