NZD/USD: US dollar surges across the board and kiwi on way to 2018 lows
|- NZD/USD has been broken below the descending supporting trend line of the 24th and 27th July lows.
- The Kiwi has been taken down as the US dollar surges across the board within the day's range of between 94.6100-95.1890.
- NZD/USD has been in direct supply since the 0.6796 highs when the pair broke below the 100-4hr SMA at 0.6786.
Analysts at ANZ explained that it sounds like a broken record, but the escalation in trade tensions has once again knocked kiwi lower:
"Whether or not it is enough to break it out of established ranges is another question, though the key may be other crosses, with some sitting on key levels."
Meanwhile, eyes will soon give a glance over to the RBNZ that is just around the corner, although expectations are that the RBNZ will probably repeat that it expects to keep the OCR at its current low level for a long while.
Analysts at Westpac Banking Corporation are also expecting that the RBNZ will restate that the next move in the OCR could be “up or down”.
Additional key quotes from their outlook:
- The OCR forecast will likely be unchanged, or perhaps could be shifted a tiny smidgen lower.
- The economy has delivered mixed messages recently, with growth slowing but inflation pressures rising. These forces will broadly offset one another in the RBNZ’s thinking.
- Like us, markets are primed for a neutral to slightly dovish Statement.
NZD/USD levels
The 10 and 21-D SMAs gave out and the price has been faded at the 10-hr SMA overnight. 0.6720 s on the cards and a break there opens the 18th July lows of 0.6713 guarding 1st July lows of 0.6689 and 0.6616 further down. This is all a congested area on the 0.66 handle, but 0.6550 guards a run to the 0.6470s. On the upside, resistance remains located at 0.6860. A break of 0.6920, the June highs, will come into focus on a follow through beyond 0.6860. The 200-month moving average resistance is at 0.7009. However, a period of consolidation is likely ahead of nonfarm payrolls and RSI is neutral on the daily sticks.
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