NZD/USD chart on Trading View used for analysis
Fundamental View:
The Reserve Bank of New Zealand (RBNZ) last week kept its official cash rate at a record low of 1.75 percent as widely expected. RBNZ Governor Adrian Orr said while there were welcome early signs inflation was rising, downside risks to growth remained, particularly “trade tensions” between some major global economies.
The New Zealand economy doesn't warrant a move from the RBNZ until 2020, while on the otherside data from the United States last week has been upbeat, confirming the Fed's hawkish stance. This growing divergence between the Fed and RBNZ could play out bearish for the major.
Technical Analysis:
Major trend in the pair is bearish. Minor uptrend rejected at daily cloud.
NZD/USD is trading in a narrow range with session high at 0.6628 and low at 0.6612.
Technical studies on intraday charts have turned slightly bearish. Stochs have rolled over from overbought and RSI has slipped below 50.
Upside finds stiff resistance at daily cloud and 50-DMA and we see upside only on decisive break above.
On the flipside, the pair is holding above 0.66 handle and finds strong support at 20-DMA at 0.6595. Break below 20-DMA will see further weakness.
Support levels - 0.6595 (20-DMA), 0.6544 (Aug 15 low), 0.65 (Sept 11 low)
Resistance levels - 0.6629 (5-DMA), 0.6654 (50-DMA), 0.6665 (cloud base)
Recommendation: Watch out for break below 20-DMA to go short, SL: 0.6660, TP: 0.6545/ 0.65
