NZD/USD: S3 on the bears map as bird losing flight from R1 below channel support

Ross J Burland FXStreet

NZD/USD is sliding in the early Asian day after the FOMC minutes were perceived as hawkish which has elevated the dollar that was making a comeback pre-event in the European morning.
NZD/USD is currently trading at 0.6547 having made a high of 0.6601 and a low of 0.6545 in recent trade.

NZD/USD had dropped below the rising channel's support line on a test of S1 after failing at the R1 on a number of recent dud attempts. The bird has been undermined once again by risk sentiment that has turned jittery - Markets were in a state of flux after last week's rout and there has not been anything terribly positive this week to help investors make up their minds one way or the other, while still barricaded up by fear son contagion stemming from just about every corner of the financial market's sphere.

FOMC minutes: Some members see the need for raising rates above neutral

Analysts at ANZ Bank New Zealand explained that the 66 cent level capped the NZD’s attempts higher overnight:

"The FOMC minutes arguably didn’t provide much in the way of new information, with the Fed set to continue on its gradual tightening path. It suggests modest USD strength can continue, which should limit much upside in kiwi right here."

NZD/USD levels

Support 0.6460
Resistance 0.6600

The monthly charts remain indicative of a continuation to the downside where we are seeing a sea of red still and this recent turn un the greenback, back to 95.50, is bound to enforce a cap on additional corrections - leaving the bird prime for fades on rallies. However, a break of the descending channel's resistance line and 0.66 the figure opens the room to 0.6633 as the 76.4% Fibo target, although, the more likely scenario is an extension of this downside to S3 located down at 0.6526 once the 23.6% gives way - and despite the recent run of NZ data that the RBNZ is more than likely to see as transitory while firmly n hold for the foreseeable future - in stark contrast to that of the Fed.

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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