- NZD/USD is trading 0.70% lower as the risk sentiment flipped.
- Donald Trump announced he is unwilling to accept the Democrat stimulus proposal.
NZD/USD 1-hour chart
NZD has always been sensitive to risk and the moment the bears had been waiting for arrived this evening (London time). Donald Trump announced he is suspending fiscal stimulus negotiations until after the elections. The Republican and Democrat delegates were still far apart as the Democrats wanted USD 2.4 trillion with of stimulus and the Republicans were proposing USD 1.4 trillion.
The chart highlights the importance of the recent trendline. The trendline has now broken to the downside and the support levels are now in focus. The red line at 0.6570 could now be the potential target for the bears. Beyond that, the main low at 0.6511 could be next up.
From time to time when a key trendline like this breaks there is often a retest before the subsequent move continues. The indicators are oversold as the MACD histogram is firmly in the red and the Relative Strength Indicator is under the 30 line.
If the move lower in risk assets continues then there could be more issues for the NZD bulls. The market had been waiting for some definitive news regarding stimulus talks but many had been expecting a positive result. It will now be interesting to see how long this bearish move lasts.
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