- Kiwi supported at (200-D SMA meets double top high of 21/22nd May).
- A stronger USD, weaker Chinese data and the ‘dovish’ signal from the ECB all conspired to send the kiwi lower.
NZD/USD has been taken down by dollar strength with better US retail sales numbers. The markets feel risk-off and the carry trade does not stack up as US rates and the greenback continue to rise, weighing on the bird and higher betas in general. Currently, NZD/USD is trading at 0.6974, a touch off the 200-4hr SMA with the price down from a high of 0.7044.
The bird has been heavy since moving sideways out of the bearish wedge, vulnerable to supply that came in yesterday after the FOMC's hawkish outcome. The pair bounced back into the sideways channel on a reverse in the greenback due to trade war angst and general volatility, although today's price action has sent the bird packing and the low exceeded yesterday's by a few pips at 0.6974.
The broader Fed-theme will likely drive any price action
The domestic calendar is light with just the Business NZ PMI that will be released by the Business NZ presenting business conditions in New Zealand. Instead, the broader Fed-theme will likely drive any price action and that is negative for the Kiwi.
"A stronger USD, weaker Chinese data and the ‘dovish’ signal from the ECB all conspired to send the kiwi lower after grinding higher after yesterday’s FOMC decision," explained analysts at ANZ, adding, "it hasn’t broken out of its recent range just yet, as support just below 0.69 has kicked in again. However, if the euro continues to suffer, then we could get pulled down with it."
NZD/USD levels
- NZD/USD Technical Analysis: Volatile Kiwi stays in range above 0.6960 key support
First support is located right round about spot currently, (200-D SMA meets double top high of 21/22nd May). However, deeper support is located at 0.6880 while resistance is located at 0.7060. With the break of the 200-month moving average support at 0.6994 and while the weekly technicals turn bearish, bears are in control now. On the downside, a break below 0.6970 opens risk to 0.6850/80. 0.6780 comes as next downside target meeting the lows of mid-Nov 2017. On the upside, albeit not favoured, 10-W SMA at 0.7053/60 guards space en route to 0.7440 as the January tops on the wide.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.