- NZD/USD suffers a bid loss on a switch up in sentiment, drops below the 21-D SMA and is stripped of buyers appetite due to a fallout in the EMS.
- The antipodeans trade as a proxy for such fundamentals.
- Support is located at 0.6630 0.6620 and 0.6607. 0.6560 comes next.
NZD/USD was offered in New York trade and extended the data-driven sell-off from 0.6717 and a fresh low was made at 0.6633 in North America before the pair recovered for a close of 0.6646.
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The dollar started off the session in NY well, picking up a safe-haven bid as investors fell out of love with the EMs once again. The fresh concerns are due to the crisis escalating in Argentia and a further 8% drop in the peso. The Argentine central bank hiked rates to 60% to halt the ongoing Peso collapsing – (The IMF Fund is agreeing to revise the terms of its $50bn Argentina bailout package after the peso faced its biggest tumble in more than three years).
The antipodeans trade as a proxy for such fundamentals and the combination of this and a poor business and building climates in yesterday’s data miss with a firm reversal in the greenback, the bird fell out of its tree and is licking its wounds back below the 21-D SMA.
“Businesses are feeling downbeat and sentiment towards the NZD is the same. The kiwi got a further kick lower overnight by month-end USD rebalancing and some more negative trade headlines. We remain bearish medium term, although note that the USD is beginning to look fully priced, which may mean the path lower is far from smooth,”
analysts at ANZ argued.
NZD/USD levels
To the downside, support is located at 0.6630 0.6620 and 0.6607. 0.6560 comes next. Above the 21-D SMA, the weekly 10 SMA is still the first key target to the upside – located at 0.6735 and if broken, it will be the first time the price has traded above it since mid-April earlier this year. While otherwise, the bull’s target in the medium term should be the 200-month moving average resistance at 0.7019.
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