The NZD/USD pair dropped for the fourth straight session on Monday. The spot clocked a high of 0.7237 (Feb 28 high) before falling to a low of 0.6982 levels today.
On Monday, NZX Futures trading suggested the key Whole Milk Powder category could drop by around 9%. On Friday, futures were pointing to a 7% decline in milk powder prices at the GlobalDairyTrade.
One may conclude that the recent decline in the NZD was at least in part due to the drop in milk futures. The sharp rise in the Fed rate hike bets only amplified the bearish move.
This also means that Kiwi could see a corrective move if the GDT auction results match the estimates. (Sell the rumor, Buy the fact).
NZD/USD Technical Levels
The currency pair was last seen trading around 0.7008. A break above 0.7050 (5-DMA) would expose 0.7069 (Dec 5 low) above which the spot could target 0.71 (zero figure). On the other hand, a breakdown of support at 0.6983 (76.4% fib of 0.6862-0.7376) would open up downside towards 0.6949 (Jan 9 low) and 0.69 (zero figure).
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