- NZD/USD hits fresh 4-week lows of 0.7181, below 0.72 handle, bias still lower.
- kiwi dented as RBNZ stays pat and warns of rate cut if inflation drops further. Weakness in the kiwi is helping the pair higher.
- The RBNZ Governor Spencer took note of the rise in the nominal exchange rate earlier today.
- RBNZ Assistant Governor McDermott has warned that central bank could use different language if the NZD exchange rate appreciates on a trade-weighted index (TWI) basis.
- The pair is holding minor support at 38.2% Fib at 0.7185, break below will see further weakness.
- Technical studies are bearish, RSI and Stochs sharply lower. We see -ve DMI crossover and MACD supports downside.
- Scope for test of 200-DMA at 0.7146. Violation there will see next support at 100-DMA at 0.7070.
Support levels - 0.7185 (38.2% Fib retrace of 0.6780 to 0.7435 rally), 0.7146 (200-DMA), 0.7070 (100-DMA)
Resistance levels - 0.72 (psychological level), 0.7267 (5-DMA), 0.7281 (23.6% Fib)
Recommendation: Good to go short around 0.72 levels, SL: 0.7270, TP: 0.7150/ 0.71/ 0.7070.
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