NZD/USD - Meaningful correction ahead?
|- NZD/USD hovers around the weekly 200-MA of 0.7272.
- Focus on NZ inflation release.
The rally in NZD/USD seems to have come to a halt as indicated by the repeated failure to hold above 0.80 levels seen last week.
As of writing, the spot is trading around the weekly 200-MA level of 0.7272.
Kathy Lien from BK Asset Management says, "the New Zealand dollar is at greatest risk of a deep correction that could take NZD/USD down to 71 cents" as data due this Wednesday is expected to show the cost of living as represented by the consumer price index (CPI) dropped in the fourth quarter due to lower food and dairy prices.
Further, the rising Treasury yields may come into play, especially if the US House and Senate lawmakers and reopen the government.
NZD/USD Technical Levels
A sustained move below 0.7272 (weekly 200-MA) would open up downside towards 0.7213 (weekly 5-MA) and 0.72 (zero levels). On the other hand, a break above 0.7289 (session high) would expose 0.7323 (Friday's high) and 0.7331 (Jan. 17 high).
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