Has the NZD/USD priced-in the weak GDT auction?

Omkar Godbole FXStreet Contributor

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).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Strongly Bearish	Neutral	High
1H	Strongly Bearish	Neutral	Low
4H	Bullish	Oversold	Low
1D	Bearish	Neutral	Expanding
1W	Strongly Bearish	Neutral	Expanding
Updated Mar 6, 15:15 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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