NZD/USD: remains in bear channel testing 100 dma

Ross J Burland FXStreet

On a bid day for commodity currencies, the bigger picture still remains that NZD/USD is down to test the 100 dma at 0.6719 having printed lows of 0.6692 from a high of 0.6766.

NZD/USD remains in a multi-week downtrend - Westpac

The main focus for the Kiwi comes with the RBNZ and markets are repricing a June cut, or further action later in the year to curb deflationary headwinds in respect to Fonterra's recent revisions to the outlook for dairy prices earlier this week. In respect to the US dollar, the attention now shifts to Yellenwho speaks tomorrow. The market has started to backpedal in respect to the hype over the recent FOMC minutes and Fed chat that June is an appropriate month to hike, while data is not stacking up to the standards required for the Fed to be able to hike.

Today's data was ok, but not great and the underlying details are weak in respect to the US being in a position that is requiring a rate hike as soon as June or beyond before the US elections towards the end of the year.

US: Durable goods order April headline good, underlying details weak - Wells Fargo

NZD/USD levels

NZD/USD was rejected at the 200 sma on the hourly chart again and remains within the descending channel formed at the start of May from 0.7053. There are three critical points to the upside starting on a break onto the 0.68 handle for the highs of 23rd May at 0.6806 ahead of highs of 0.6839 17th May highs and 12th May highs at 0.6847. The downside has the 100 dma at 0.6719 ahead of the 200 dma at 0.6648 in pursuit of the 2016 lows of 0.6411.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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