FxWirePro: NZD/USD set to extend downside, New Zealand's Budget forecasts significant economic deterioration

NZD/USD chart - Trading View 

NZD/USD was trading 0.15% lower on the day at 0.5982 at around 04:50 GMT, after closing 1.40% lower in the previous session.

Bearish pressure builds around the kiwi and is likely to see further weakness in the pair.

After the dovish RBNZ on Wednesday, New Zealand's budget released earlier today forecasted a a sharp fall in economic activity.

New Zealand’s real GDP growth rate is forecast to decline from 2.8% in the year ending June 2019 to -4.6% in the year ending June 2020.

The government expects a quarterly decline in GDP of over 20% in the June 2020 quarter.

Jobless rate is expected to jump to 8.3% in the year ending June 2020 and peak at 9.8% in September 2020. 

Dismal forecasts along with the ongoing Aussie-Sino trade war weighs on the Kiwi pair. Risk aversion to driver further losses.

Technical studies have turned bearish. Price action is below major moving averages and oscillators support weakness.

'Bearish divergence' on stochastics adds to the downside pressure. Scope for dip till 61.8% Fib at 0.5739.

Major Support Levels: 0.5957 (Cloud base), 0.5906 (38.2% Fib), 0.5822 (50% Fib)

Major Resistance Levels: 0.6011 (50-DMA), 0.6052 (5-DMA), 0.6089 (55-EMA)