NZD/USD: bulls run out of steam at key resistance in 80% correction
|- Bulls need to get above the 200-month moving average resistance at 0.7006.
- On the way there, the 10-D SMA is located and where the descending trend line is located.
NZD/USD has opened the week at 0.6758 and is oscillating are there in a slow start and only a slew of Chinse data later today ahead of NZ CPI tomorrow.
As far as last week's close went, the bird made a partial recovery of the dollar's attack in the previous session from 0.6786 down to 0.6725 the late London low where NY traders bid the pair right back up to 0.6764, steadying around 0.6760 for the close and -0.3% over the full trading day.
"The kiwi continues to struggle, as poor domestic data and the uncertain global trade backdrop take their toll. The local CPI release tomorrow will be a critical event to determine whether this weakness can continue, especially at a time when market positioning (apparently) still remains extremely short," analysts at ANZ argued.
Greenback mixed and enables 80% correction
The US dollar of has been as mixed as it was on Friday, following last week's US CPI inflation that came in slightly weaker than market expectations; (Headline CPI was up 0.1% m/m, compared with 0.2% expected, to reach 2.9% y/y). However, the greenback remains in the hands of the bulls given demand for US assets amid prevailing trade tensions and indeed favourable interest rate differentials keep the greenback underpinned. Before the NY session's fade, the DXY was once again testing the key technical pivot at 95.149 while 97.873 remains as the next potential target.
NZD/USD levels
A deeper support comes as 0.6720 and resistance is located at 0.6860 (21-D SMA 0.6816). 0.6783 is where the 10-D SMA is located and where the descending trend line is located. 0.6920 puts the bulls back in control and the June highs will be up for grabs. However, bulls really need to get above the 200-month moving average resistance at 0.7007.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.