• NZD/USD has dropped to three-month lows despite the rate cut by China. 
  • Technical studies suggest scope for deeper declines toward 0.6322 (Nov. 8 high).

NZD/USD has dropped to 0.6356, the lowest level since Nov. 14, having faced rejection at the descending or bearish 50-hour moving average (MA) 0.6395 about 30 minutes ago. 

The Kiwi is being offered despite the rate cut by China. The world's second-largest economy cut the one-year Loan Prime Rate (LPR) to 4.05% as expected from 4.15%. Meanwhile, the five-year rate has been reduced to 4.75% from 4.8%. 

The negative response from the China-sensitive currencies like the NZD and the AUD suggests the markets are reading the rate cut as an acknowledgment of the possibility of a marked coronavirus-led slowdown in the first quarter. 

From the technical perspective, the series of lower highs and lower lows seen on the daily chart indicate the path of least resistance is to the lower side. More importantly, technical indicators aren't reporting oversold conditions, so there is scope for further declines. 

The bearish outlook would be invalidated if the spot finds acceptance above 0.6411 (the high of Wednesday's doji candle). That said, a close above 0.6488 (Feb. 12 high) is needed to invalidate the lower highs setup and put the bulls back into the driver's seat. 

Hourly chart

Trend: Bearish

Technical levels


Today last price 9602.95
Today Daily Change 4.56
Today Daily Change % 0.05
Today daily open 9598.39
Daily SMA20 9805.56
Daily SMA50 8924.29
Daily SMA100 8207.8
Daily SMA200 8885.15
Previous Daily High 10307.33
Previous Daily Low 9309.77
Previous Weekly High 10511.86
Previous Weekly Low 9707.96
Previous Monthly High 9568.13
Previous Monthly Low 6856.63
Daily Fibonacci 38.2% 9690.84
Daily Fibonacci 61.8% 9926.27
Daily Pivot Point S1 9169.66
Daily Pivot Point S2 8740.93
Daily Pivot Point S3 8172.1
Daily Pivot Point R1 10167.23
Daily Pivot Point R2 10736.06
Daily Pivot Point R3 11164.79



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