- NZD/USD has been giving off bearish smoke signals with a pop lower overnight to score a fresh swing low of 0.6713 within the negative flow.
- NZD/USD edged down around -0.2% over the day, reflecting slightly softer risk sentiment in Europe.
US markets were closed for Martin Luther King Day so European markets were therefore quiet. However, equities remained under downward pressure which dragged on high beta currencies such as the bird. Investors are anxious over the global growth outlook that continues following yesterday’s mixed Chinese GDP release and another downgrade for the global growth outlook from the IMF.
“USD rallied on trade concerns and as weakness in Chinese data weighed on commodity currencies (though it perhaps wasn’t as bad as some had feared),” analysts at ANZ Bank explained. “Eyes now turn to NZ CPI tomorrow. A negative or a widely-expected zero print could weigh, with markets increasingly expecting a more dovish RBNZ in February. In our view, the mix of inflation will matter; watch the non-tradable component.”
NZD/USD levels
- Support 0.6650
- Resistance 0.6860
The price was rejected the 200-hr SMA on two breakup occasions of late and the doji formed on the 14th Jan has played out into a series of lower highs on a daily time frame basis. Overnight price action has printed a fresh swing low and technical indicators remain bearish. The price is now testing below the 21-D SMA located at 0.6740 with a confluence of the 25th Nov pivotal low and a break below there will open up 0.6705. A break of the 100-D SMA at 0.6688 with daily closes will sure up the negative bias again, especially on a break back below the 23.6% Fibo.
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