NZDUSD Testing An Important Support, Break Near?

The New Zealand dollar took advantage of the US dollar weakness recently and traded back towards the 0.7860 level. However, the NZDUSD pair struggled once again to clear the mentioned level and currently trading lower. The New Zealand Food Price Index (FPI) was released by the Statistics New Zealand earlier during the Asian session, which registered an increase of 0.3%. However, the REINZ house price index was also released, which missed the mark and declined by 1%. In short, the New Zealand dollar came under pressure during the last session and traded lower towards the 0.7720 support area.

There is a critical bullish trend line formed on the hourly chart of the NZDUSD pair, which is acting as a support for the pair as of writing. The Kiwi dollar buyers are fighting hard to protect the downside in the pair. However, there are a few negative things to note from the charts including the fact that the pair is trading below the 100 and 200 hour moving averages, which might encourage sellers in the short term. On the other hand, the bullish trend line is acting as a barrier for the sellers, which also coincides with the 61.8% fib retracement level of the last leg from the 0.7617 low to 0.7864 high. So, it’s a fight currently and it would be interesting to see who wins the battle.

On the downside, a break below the highlighted trend line might call for sharp loses in the pair which could take it towards the 0.7640 support area.

Overall, one might consider selling with a break below the trend line in the NZDUSD pair as long as it is trading below the 100 MA.

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Posted By Simon Ji of IKOFX Technical Team: Online Forex Broker
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