- The Kiwi is on the defensive with the daily chart reporting bearish lower highs pattern.
- New Zealand’s treasury report sounded cautious on growth, could add to pressure around the NZD.
NZD/USD risks falling to 0.6580 and may break lower, having created a bearish lower high last week.
Interestingly, the bearish lower high has been established near the resistance of the trendline connecting March 26 and April 17 lows.
That trendline resistance is now seen at 0.6654 and the pair is trading at 0.6608 with the 5- and 10-day moving averages (MAs) trending south, indicating a bearish setup. The 14-day RSI has also faced rejection at the former support-turned-resistance of 44.
Supporting the bearish technicals is New Zealand Treasury’s report released earlier today, which said the growth rate in the second half of 2019 could be lower than expected. The Treasury’s report also took note of business pessimism due to the government’s tax policy. Add to that, the renewed fears of the US-China trade war and the path of least resistance appears to be on the downside.
Daily chart
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Trend: Bearish
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