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The  New Zealand dollar  slipped from the highs as the mood was not that positive any more and despite a rise in milk prices. What can we expect from the pair moving forward? Two events lined up.  Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.

While the  NZIER Business Confidence dropped from the highs of 15 points to only 2, the kiwi received some good news from a bounce back in milk prices: the GDT Price Index advanced by 2.1%. In the US, data was generally OK, with the meeting minutes and Yellen not hurting  the dollar much.

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NZD/USD  daily graph  with support and resistance lines on it. Click to enlarge:

NZDUSD technical analysis April 11 15 2016

  1. FPI:  Tuesday, 22:45. The  Food Price Index is  relevant for New Zealand due to the vast milk exports, albeit the latter ones have the upper hand. Prices dropped by 0.6% in February.
  2. Business NZ Manufacturing Index: Wednesday, 22:30. This PMI like indicator has been upbeat, stadning at 56 points in February. A similar number is on the cards now.

NZD/USD  Technical  Analysis

Kiwi/dollar  climbed down from the highs and made a clear breakdown from the 0.6820 level (mentioned last week)..

Technical lines, from top to bottom:

We start from higher ground this time. 0.7160 worked as  support when the kiwi was trading on much higher ground in 2014. Also 0.7075 served as support back in mid 2014.

The round level of 0.70 is already in sight.  The low of 0.6940 allowed for a temporary bounce.

The round 0.69 level has  switched positions to resistance.  0.6860 was a low point as the pair dropped in June 2015. 0.6820 is worth noting after it capped the pair  in March 2016.

It is followed by  0.6780 that capped the pair in recent months.  The  round level of 0.67 that works nicely as support.  Another line worth noting is 0.6640, which capped the pair in November.

The post crisis low of 0.6560 is still of importance.  Below, the round 0.65 level is of high importance now, serving as support.

I am  bearish  on  NZD/USD

The bad news regarding the US dollar is already out and while things are OK in New Zealand, there may be room to the downside.

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