- Disappointment at the latest GDT price auction weighs on the kiwi. NZD/USD dips into daily cloud.
- The latest dairy auction prices in New Zealand have shown a -0.4% decline to an average price of $3,339 per tonne.
- On the other side, USD remains bid on rising rate hike expectations this year on the back of strong retail sales data and Fed's Dudley's optimism.
- NZD/USD is trading a narrow range on the day, is holding above the 0.72 handle.
- Technical indicators are bearish, RSI is well below 50 and biased lower. MACD also supports trend lower.
- We see scope for further downside on break below 0.72 handle. Test of 200-DMA at 0.7124 then likely.
Support levels - 0.72 (38.2% Fib retrace of 0.88228 to 0.61968 fall), 0.7167 (weekly 20-SMA), 0.7150 (50-DMA)
Resistance levels - 0.7270 (5-DMA), 0.73, 0.7320 (50-DMA)
Call update: Our previous call (http://www.econotimes.com/FxWirePro-NZD-USD-takes-50-DMA-support-at-07308-break-below-will-see-further-weakness-844297) has hit TP1&2.
Recommendation: Book partial profits at lows, lower trailing stop to 0.73. Watch out for break below 0.72 for further downside. Target 0.7170/ 0.7150.
FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at -60.5298 (Neutral), while Hourly USD Spot Index was at 77.1413 (Neutral) at 0530 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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