- NZD/USD has been sliding down the descending channel below the 23.6% fib retracement support area following a rally in the greenback as investors flip dollar bullish across the board – (USD/CNH is up to 0.9774).
- NZD/USD is currently trading at the lows of today’s range at 0.6610, down from a high of 0.6646.
The markets took the FOMC’s bullish outlook of the economy and today’s confirmation in the data sparked bullish feeding frenzy and the high betas/commodity complex took the brunt of the dollar’s rampage – (DXY up to the 95 handle).
0.6600 is key, guarding 0.6577
The final cut on Q2 GDP printed 4.2%, in line with expectations while durable goods beat forecasts and sent the dollar higher. The markets are now trading the US policy/economic divergence on a macro scale and have knocked the bird off its perch. Today we get the Chinese manufacturing Caixin as the next major risk for the antipodeans which could well come in below expectations of 50.5 and send the Kiwi well on its way to a full extension back to pare the 0.65-0.6699 retracement on a break of the 61.8% level at 0.6577. Currently, the bird is on the brink of completing 50% of that move at 0.6600.
Analysts at ANZ explained that the kiwi has moved further away from key resistance around 0.6720 and we think it will again be out of reach today, with some large option strikes around 0.66 serving as a decent anchor point – “There remain a number of competing tensions right now, leaving the near-term outlook finely balanced.”
NZD/USD levels
Support 0.6590 Resistance 0.6720
NZD/USD continues to extend below the doji and targets the 0.6600 fib 50% level with bearish momentum built up over the course of the NY session en route to the 21-D SMA at 0.6601. A break there opens risk to 0.6577 (61.8% correction of the recent bullish retracement. A drop below there opens a continuation risk towards 0.6500 that would open up 0.6344 and 0.6306 on the wide.
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