NZD/USD bears take a breather at a critical support area
|- NZD/USD finally stalls where a key level of support and orders are accumulated.
- NZD/USD is currently trading at 0.665 and markets await US advance GDP.
In what is now expected to be a quiet session and close in Asia as traders await U.S. GDP in the U.S. session, NZD/USD has been consolidating in its slight correction from the lows meeting the nearest level of orders since clearing out the less committed bulls higher up around 0.57 the figure.
Since the start of the week's headlines which provoked speculation that the RBNZ was on the path towards QE the Kiwi continues to struggle after falling in sympathy with the AUD following RBA Governor Lowe’s comments yesterday that The key takeaway for us was Lowe’s comment that 'it is “reasonable to expect an extended period of low interest rates”.
On the Dollar leg, bulls are basking in sunny-data which continues to dial down the tone with respect to next week's anticipated rate cut from the Federal Reserve. "The kiwi will continue to take cues from offshore events, with markets looking ahead to US Q2 GDP and consumption," analysts at ANZ bank argued.
Looking ahead, the bears will be relying on a strong print from the US Advance Gross Domestic Produce reading where robust consumer spending would be expected o support Q2 GDP growth. The Federal Open Market Committee next week will determine the immediate fate of NZD/USD and the continued flow of robust economic data from the U.S. might be enough to see the Fed cut rates but remain on the sidelines into 2020. It is one of the 'smaller' meetings without updated projections, so the focus is on the rate announcement, statement and Powell's press conference for further clues.
NZD/USD levels
- Support 0.6630.
- Resistance 0.6700.
NZD/USD fell below the 38.2% Fibo and printed a lower low of 0.6654 overnight, clearing out stops and advancing towards the bottom of the ascending channel and rising support line. A 50% retracement opens the 0.6630s ahead of the 61.8% around 0.66 the figure. A correction higher to the 23.6% Fibo would meet with prior resistances around 0.6715/20.
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