An uptick in the ANZ - NZ consumer confidence number and slightly dovish comments by Fed’s Evans helped stall the sell-off in the NZD/USD pair at 0.7220 levels.
The spot is now trading marginally positive on the day around 0.7232. The momentum has shifted in the favor of bears if we take into account the bearish crossover on the daily MACD.
On a larger scheme of things, the rally from the low of 0.6818 looks mature, given the exhaustion around 0.73 levels and Monday’s bearish inverted hammer candle.
Focus on GlobalDairyTrade (GDT) Auction
Futures suggest a flat to weak result of the GDT auction today. Two weeks ago, the GDT index increased for the sixth consecutive rise. On annualised terms, the index is up 57%. An uptick in the GDT index today could revive the bullish move in the NZD.
On Thursday, the Reserve Bank to hold the OCR at 1.75 percent and to maintain a neutral outlook for interest rates.
NZD/USD Technical Levels
A break above 0.7247 (Feb 23 high) would expose 0.7319 (June 14 high) and 0.7350 (Jan 31 high). On the downside, a break below 0.72 (zero figure + 23.6% Fib R of May low - June high) would open up downside towards 0.7171 (June 12 low), 0.7147 (June 2 high) and 0.7127 (38.2% Fib R). The RSI has turned lower from the overbought region, while the MACD bearish divergence has been followed by a bearish crossover confirmation. Caution is advised as indicators suggest a pullback could be in the offing.
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