NZD/USD drops below 0.66 for the first time since March 2016

Markets continue to offer NZD, courtesy of dovish RBNZ and Fonterra's cut in farm gate milk prices.
Oversold conditions may put a temporary floor under the NZD.

Omkar Godbole FXStreet Contributor

The NZD bears are on the offensive, having pushed the currency down to the 29-month low of 0.6593 today.

At press time, the NZD/USD pair is trading at 0.6604 - down 2.18 percent from the previous day's high of 0.6747.

The kiwi suffered a pennant breakdown yesterday - a bearish continuation pattern - after the RBNZ surprised markets with a dovish forward guidance on interest rates.

Meanwhile, New Zealand’s dairy giant Fonterra announced a cut in its 2017/2018 farmgate milk price to NZD 6.70/kg earlier today, further bolstering the bearish pressure around the NZD.

So, there is little likelihood of the bulls making a strong comeback in the short-term. However, the currency is now looking oversold as per the 14-day relative strength index (RSI). As a result, the bearish momentum may wane ahead of the weekend.

NZD/USD Technical Levels

Support: 0.6593 (session low), 0.6569 (daily pivot support 1), 0.6523 (daily pivot support 2)

Resistance: 0.6621 (session high), 0.6686 (5-day moving average), 0.6720 (Aug. 3 low)

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bullish	Neutral	Shrinking
1H	Bullish	Oversold	Low
4H	Bearish	Oversold	High
1D	Strongly Bearish	Oversold	Expanding
1W	Bearish	Oversold	Shrinking
Updated Aug 10, 02:15 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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