NZD/USD: Off 6-month low, focus on broader market sentiment
- The Kiwi has recovered 50 pips from the six-month low of 0.6826.
- NZD/USD created a doji candle yesterday, signaling the market has turned indecisive after hitting a 6 - month low of 0.6826.
- A corrective rally could be capped by risk aversion.
The NZD/USD is reporting marginal gains in early Asia, having clocked six-month low of 0.6826 on Thursday.
The currency pair created a doji candle yesterday, signaling indecision in the marketplace. However, when viewed against the backdrop of a slide to a six-month low of 0.6826, the doji candle indicates bearish exhaustion.
Further, the relative strength index (RSI) on the 4-hour chart is rising from the oversold territory (from below 30.00).
Also, Statistics New Zealand reported a seasonally adjusted net gain of 5090 permanent and long-term migrants in May. The migration gain is seen providing support for growth in the long-run.
So, a minor corrective rally could be in the offing, although broader market sentiment could play hardball.
Risk sentiment remains fragile as the US and China dig in heels on trade conflict. The Asian equity markets are expected to fall, tracking losses in stock markets across the globe.
NZD/USD Technical Levels
At press time, the currency pair is trading at 0.6870. Key resistance is located at 0.6886 (5-day moving average), 0.69 (100-hour moving average), 0.6917 (resistance on the hourly chart). Meanwhile, support is lined up at 0.6859 (support on the hourly chart), 0.68226 (previous day's doji candle low), and 0.68 (psychological support).
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
