- NZD/USD is extending consolidation, struggles to gain momentum after 50-DMA breakout.
- Back-to-back inverted hammer formation on daily charts suggests downward pressure.
- Watch out for break below daily cloud for resumption of weakness.
- Technical studies support upside in the pair. RSI and Stochs are biased higher. We see +ve DMI dominance and ADX is rising.
- Immediate resistance lies at 100W SMA at 0.7053. Next major resistance is at 0.71 level (200 DMA). Breakout there could see continuation of uptrend.
- Immediate support is seen at 0.7000 (5-DMA) and we see bullish invalidation on break below daily cloud.
- On the data front focus lies on Q3 GDP (Thu), which is expected to rise 0.4%, along with Q4 CPI on 25 Jan which forecasted to rise a tad to 2.0%.
Call update: We had advised a long (http://www.econotimes.com/FxWirePro-NZD-USD-stalls-4-day-rebound-slips-below-070-handle-kiwi-bulls-unimpressed-by-China-data-dump-1058170).
Recommendation: Hold for upside.
FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at 5.78764 (Neutral), while Hourly USD Spot Index was at -128.256 (Bearish) at 0800 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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