NZD/USD: perched above key descending channel resistance turned support
|- NZD/USD has morphed into a bullish bias.
- NZD/USD traders have plenty of risk factors to consider this week.
NZD/USD has been stabilising in recent weeks and moving into a neutral formation on the weekly charts above the prior 2018 resistance line and outside of the descending channel. It would appear that the antipodeans have bottomed and are morphing into a new bullish lease of life as markets stablise as we head into key risks for the week.
Dollar could crumble on Democrat Houvictoryory
The US mid-term congressional elections are a key risk for the dollar. Analysts at ANZ Bank New Zealand Limited said that their base case (which we assign a 55% probability) is a Republican Senate and Democrat House. "If Democrats gain a majority, the Trump administration will likely focus more on foreign policy, with less domestic stimulus on the cards. Markets are likely to react accordingly to this softer growth outlook."
Then, we have the RBNZ and given how well the bird has fared, we will need to hear and uber-dovish tone from the central bank to really knock the bird off from its perch and back into the descending channel. First up, we have the RBA today where the kiwi might look to take some cues from as a prelude to the RBNZ event.
NZD/USD levels
- Support 0.6550.
- Resistance 0.6690.
NZD/USD found support at the 23.6% Fibo at 0.6635 and confluence with the 21-hr SMA that guards 0.6601 and the 38.2% Fibo. 0.6550 is where the 61.8% retracement falls. To the upside, R2 is located at 0.6716 and the 138.2% is located at 0.6775 ahead of the 161.8% that meets the June 20 low at 0.6826 ahead of the double top July-Aug highs at 0.6850/60.
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.