Refer NZD/USD chart on Trading View
- Kiwi slumps across the board after RBNZ's unexpected dovish forward guidance.
- The Reserve Bank of New Zealand kept interest rates unchanged as expected.
- However, it surprised markets by revising lower the Sept 2019 interest rate forecast to 1.8 percent from the previous 1.9 percent.
- Further, RBNZ governor Orr said the central bank expects the interest rates to stay at the current level of 1.75 percent through 2019 and into 2020.
- Adding to the bearish pressure around the kiwi was the escalating US-China trade tensions.
- NZD/USD hit 17-month lows at 0.6664 and could continue to lose altitude in the near future.
- Technical studies for the pair also suggest weakness. Price action below cloud and major moving averages point south.
- The major has shown a breach from rising channel pattern and has slipped below 61.8% Fib. We see weakness till 78.6% Fib at 0.6788.
- Immediate resistance is seen at 21-EMA at 0.6772. Break above 55-EMA at 0.6848 could see test of 200-DMA.
Support levels - 0.66, 0.6575 (Mar 2016 low), 0.6488 (78.6% Fib)
Resistance levels - 0.67, 0.6727 (5-DMA), 0.6772 (21-EMA)
FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at -44.7906 (Neutral), while Hourly USD Spot Index was at -101.852 (Bearish) at 0325 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
