- Risk sentiment improving as a positive for the bird, NZD/USD potentially heading to 0.6850 level.
- NZD showing hints of consolidation to close out last week.
NZD/USD has oped to the downside, opening at 0.6989 and has since moved to score a low of 0.6772, well and truly capped by the 21-4hr SMA. Markets are trading in thin liquidity to start the month in early Asia and weekend headlines are mixed, leaving risk in the balance of fuller markets kicking in later today.
The bird rose from 0.6740 lows on board based dollar weakness last week as well as on signs that the Chinese currency and stock market dives were holding key support, improving risk sentiment for the end of last week.
Looking for underlying demand emerge around these levels
Analysts at ANZ Bank New Zealand Limited, (ANZ) explained that the NZD showed hints of consolidation to close out last week, although not before giving support around 0.6740 a nudge and said that they retain a modest negative medium-term bias overall, but wouldn’t be surprised to see some underlying demand emerge around these levels.
NZD/USD levels
While below the key 200-month moving average resistance at 0.7007 technicals stay bearish while RSIs remain biased to the downside longer term, (however, daily RSI has kept back out of oversold territory). Near-term support is located at 0.6740 while only a break above 0.6850 would alleviate the downside pressures.
0.6680 comes as the lows of 21st May 2016 on the weekly sticks. On the flipside, albeit not favoured, above that 0.6850 level, the 50-D SMA at 0.6955 comes ahead of 0.7060 which is guarding space en route to 0.7440 as the January tops on the wide.
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