NZD/USD: bulls capped by hard 0.6950 and outlook could turn sour
FXStreet News

NZD/USD: bulls capped by hard 0.6950 and outlook could turn sour

  • NZD/USD: bulls taking advantage of the proxy trade vs trade headlines.
  • NZD/USD: technicals remain bearish longer term, 0.6950 is a hard resistance.  

NZD/USD has been making tracks to the upside, with traders getting behind the proxy currencies to the ongoing trade uncertainties, albeit on the more positive headlines that have emerged since the two-days of talks that took place between China and the US on Thursday and Friday of last week. Currently, NZD/USD is trading at 0.6946 at the time of writing has made a fresh high of 0.6950 and a low of 0.6883.

NZD/USD trades as a proxy, bullish short-term

Analysts at ANZ have explained that New Zealand is exposed not so much via trade but rather by the fact our currency can be traded as a proxy for commodity risk:

“The wobbles, insofar as what they suggest the challenges will be as the global liquidity cycle turns, support our view that the NZD will remain under medium-term pressure,” that analysts explained, adding, “The softer retail data provided only a modest set-back for the NZD, as the more positive tone to US-China trade relations and rumours of a relaxation in the Chinese birth limits lent support. After a decent move lower (and some technical momentum indicators looking oversold), it appears the NZD has seen its near-term lows for now.”

NZD/USD levels

Support comes in at 0.6850 and resistance at 0.6950. The next upside key target is located at  0.7080. The NZD/USD has taken out the 200-month moving average resistance at 0.6980. However, weekly technicals remain bearish and RSIs are biased to the downside. Below 0.6850, 0.6780 comes as next downside target meeting the lows of mid-Nov 2017.  

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.